Severance Will Cost Motorola $229 Million In Q1 Charges

Motorola (NYSE: MOT) said today that it will take an additional pre-tax charge of about $110 million, relating to severance costs associated with the elimination of 2,800 jobs, according to a document filed with the SEC. The job cuts are not new, but associated with plans detailed in October 2008 and January 2009. In addition, the company will record a $13 million charge associated with terminating some contracts and marking down the value of some assets. In all, the pre-tax charge in the first quarter may soar to $229 million — mostly related to severance costs relating to the elimination of 5,600 employees.

The job cuts are part of a larger restructuring aimed at getting its expenses in line with revenues, which have suffered as Motorola lost marketshare in the mobile devices space to other smartphone-makers, such as Apple (NSDQ: AAPL) and Samsung. As part of the company’s new direction, it has said it will focus on two smartphone platforms, including Windows Mobile and Google (NSDQ: GOOG) Android. So far this year, it has not released any new smartphones, but has unveiled the Motorola Evoke — a phone that looks a lot like an iPhone because of its large touchscreen and widget strategy, but is considered a feature phone because it has a closed operating system.

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