Motorola has said that no job reductions among its 1,600 staff in Dublin and Cork are planned as part of a global restructuring, given renewed urgency by poor second-quarter results published this week. The results and the poor outlook for the third quarter confirm fears of new troubles at a technology giant that for years was known for solid profitability.
But the manager of Motorola Ireland, Mr John O'Connor, said he did not anticipate any impact on Irish jobs as a result of the quarterly results, which follow on the announcement in June of a worldwide restructuring plan involving 15,000 job losses.
Mr O'Connor said the corporate restructuring, which had seen job losses in Malaysia, Puerto Rico and the US, would continue over the next 12 months. "There are a lot of things going on at the moment, a lot of changes. At this time there is no plan for job cuts.
He added that 300 contract jobs in Swords, Dublin, were "stable" and the company's new 150-job semiconductor centre in Cork was proceeding on schedule. "The building is already there and the initial employees are coming on board as we speak," he said. Sources say that senior management in Motorola presented a fairly upbeat message on the Irish operation to the Tanaiste, Ms Harney and senior IDA executives when they met recently at the company's US headquarters. Motorola's current operations look set to broadly escape the current restructuring, although earlier investigations about possible further expansion in Ireland are now firmly on hold.
Motorola has managed to avoid the operating losses that many analysts had predicted it would report. But it offered little hope of a quick recovery. The chief executive, Mr Christopher Galvin, said in a statement that "the negative impact on our business is likely to continue for at least the remainder of the year".
Mr Galvin pledged new efforts to restructure and refocus the company, building on the cuts of 15,000 jobs, about 10 per cent of its work force, that were announced last month.
He cited a weak semiconductor market and economic crisis in Asia to explain the poor numbers. But many analysts see management problems playing a major role as well and they repeated speculation on whether Mr Galvin, a grandson of the company's founder, can survive in the job.
"It is internal structural problems," said Mr Greg Geiling, a telecommunications analyst at investment bank J P Morgan & Co. "The markets they sell into, other than semiconductors, are booming."
Motorola has mistakenly "acted like a company in a leadership position whose market share is invincible," said Mr Mark Lowenstein, vice president of wireless research at the Yankee Group, a Boston-based market research firm.
One of the US' oldest and largest technology companies, Motorola has stumbled repeatedly in recent years. Its PowerPC microprocessors have not done well, and demand for chips in general is down. In addition, its market share in cellular phones has slipped in the face of competition from European firms Nokia and Ericsson.
The company reported an operating profit of $6 million (1 cent per share) for the quarter, down from $392 million (64 cents) in the quarter a year earlier. Including one-time charges for restructuring, the bottom-line figure was a net loss of $1.3 billion, compared with net income of $268 million last year.
