Motorola Inc unveiled a series of cost-saving moves on Wednesday, including cutting the base pay of its top two executives and freezing pension contributions.
The troubled US mobile phone manufacturer said co-chief executives Greg Brown and Sanjay Jha had both agreed to a 25 percent decrease in base salary next year.
Brown will also forgo this year’s cash bonus, the Schaumburg, Illinois, company said in a statement, while Jha, who took over Motorola’s mobile devices unit in August, will take a reduced cash bonus as restricted stock.
Motorola, without providing any details, also said: “Employees in many of the markets in which it operates will not receive a salary increase in 2009.”
PENSION CUTS
The company also announced new regulations governing its pension contributions.
Motorola said that as of March 1 it would “permanently freeze its US pension plans, preserving vested benefits accrued by employees and retirees but eliminating future benefit accruals.”
It said that as of Jan. 1, it would temporarily suspend making matching contributions to the 401(k) retirement plans of employees.
“The sustained downturn in the global economy requires that we take these difficult but necessary steps,” Brown and Jha said in a statement. “While serving our customers remains a top priority, we are equally focused on our cost structure, and we will continue to implement appropriate measures to conserve cash and reduce expenses.”
The moves are the latest cost-cutting measures at Motorola, which announced on Oct. 30 that it was cutting its global workforce by 4.5 percent, or some 3,000 employees, and delaying the spinoff of its troubled cellphone unit.
The ailing company had 66,000 employees worldwide at the end of last year and the October job cuts took the total number of layoffs since January last year to 13,000.
LOSSES
Motorola reported a net loss of US$397 million in the third quarter of the year after reporting a net profit of US$60 million for the same period last year.
Motorola enjoyed success with its popular Razr phone launched in 2005 but has been losing ground since to Apple and Research in Motion as well as other major cellphone makers such as Nokia, Samsung and Sony Ericsson.
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