Motorola to Lay Off Employees

In an effort to cut costs, Motorola Inc. is shutting down its only American cell phone manufacturing operation and in the process, laying off 2,500 employees.

Motorola says it plans to stop cell phone production at its Harvard, Ill., facility by June 30. The jobs being eliminated represent nearly 2 percent of its work force of 130,000.

The Harvard operation carried the highest operating cost of Motorola’s six plants worldwide.

About 2,500 employees will remain at the company facility in Harvard, where they will continue to work in research and development, marketing and customer orders.

Motorola's share of the global cell phone market slipped to just 13 percent in the third quarter of 2000, while Nokia's rose to 30 percent. Sweden's Ericsson was a close third.

Six weeks ago, Motorola announced plans to eliminate 2,870 jobs in Iowa, Florida and Ireland.

Sales of mobile phones and other wireless devices rose just 1 percent in the fourth quarter of 2000, to $3.5 billion. Reflecting a downturn, orders for phones and wireless devices dropped by 20 percent to $2.9 billion.