Motorola Inc. on Dec. 17 unveiled a series of cost-saving moves, including cutting the base pay of its top two executives and freezing pension contributions. The company said co-chief executives Greg Brown and Sanjay Jha had both agreed to a 25% decrease in their base salary next year.
Brown will also forgo his 2008 cash bonus, 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."
The company also announced new rules governing its pension contributions. Motorola said that as of March 1 it will "permanently freeze its U.S. pension plans, preserving vested benefits accrued by employees and retirees but eliminating future benefit accruals."
It said that as of January 1, it will temporarily suspend making matching contributions to the 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.
"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 October 30 that it was cutting its global workforce by 4.5%, or some 3,000 employees, and delaying the spinoff of its troubled cell phone unit. The ailing company had 66,000 employees worldwide at the end of 2007 and the October job cuts took the total number of layoffs since January 2007 to 13,000.
Motorola reported a net loss of $397 million in the third quarter of the year after reporting a net profit of $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 cell phone makers such as Nokia, Samsung and Sony Ericsson.
Copyright Agence France-Presse, 2008