Motorola freezes salaries and benefits, but no layoffs announced
By Jacqueline Emigh | Published December 17, 2008, 4:54 PM
To cut costs, Motorola is reducing the salaries of its co-CEOs and freezing the pension plans of all employees, while avoiding job layoffs at the moment.
In response to what Motorola calls "continuing global economic challenges," the company is making changes to employee benefits and executive compensation. Yet the cost reduction measures don't include any job losses right now. Many of Motorola's existing employees will not receive salaries in 2009, also under the plan.
But Motorola co-CEOs Greg Brown and Sanjy Jha are each voluntarily accepting an actual decrease of 25% in their base salaries. Brown also plans to give up any 2008 cash bonus earned under the company's incentive plan, according to a statement from Motorola this morning.
Jha, who joined Motorola last summer from Qualcomm, has a contract with Motorola that provides for a guaranteed cash bonus for 2008. However, Jha's bonus will be "voluntarily reduced by an amount equal to [Brown's] forfeited bonus," and the rest will be taken in restricted stock units.
In permanently freezing its pension plans, Motorola intends to preserve the vested benefits already earned by employees while "eliminating future benefit accruals." But the company will continue to fund pension obligations to current and future retirees.
Starting January 1, 2009, Motorola will also temporarily suspend all company matching contributions to the company's 401(k) plan. Employees in the US will be able to keep making payments to their plans, but they won't get matching contributions from Motorola.
No job losses, huh? Tell that to the 3000 ex-motorolans that were cut last month. Motorola's SPIN isn't the whole truth.
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|Neither is the article's!
Motorola didn't say there were no layoffs. Here it seems to reference forward - ongoing- plans.
And they are no different in many respects than many other companies that are trimming non-essential costs; just as individuals and families are examining budgets to eliminate none essential expenses are ironically called "responsible".
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|LEAN won't help if non-producing cost centers don't generate a positive return on investment in the near term. Now is not the time to keep such drains on the system, regardless of how nice it may sound.
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|I belive this is a good step taken forward by Management.Layoff is not the solution, thing is how best we can adopt the LEAN concept in our system,second how best we can go forward with existing and new products marketing in the global market.
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