Changes ahead as Motorola prepares for split

Published: 5/3/2010 9:18 PM | Updated: 5/3/2010 9:18 PM

Motorola Inc.'s co-CEOs said Monday that they likely will announce this summer what the two separated companies will look like, as one company will have 25,000 workers and the other will be much smaller.

Greg Brown, who will head the Enterprise Mobility and Networks businesses, will oversee about 25,000 workers. Sanjay Jha, who will lead the Mobile Devices and Home businesses, said he will "have a much smaller team."

"We plan to consolidate at some sites," Jha said.

Neither executive would say exactly how many workers would stay with Jha's team. But both assured suburban workers that area campuses would remain, although reconfigured again. The comments came after Motorola's annual shareholder meeting, where about 200 shareholders gathered at The Meadows Club in Rolling Meadows.

Within the last 10 years, Motorola has cut its global work force from about 150,000 workers to about 53,000 as of December 2009. The company had about 64,000 employees in December 2008, according to the company's annual report filed with the U.S. Securities and Exchange Commission.

"The work force is relatively stable now, but we could have some minor adjustments," Jha said.

Besides the structure of the work forces, Motorola also seeks to generate more cash for the split by selling more buildings at its suburban campuses and then leasing them back.

Brown said there is overcapacity at some sites and they are looking to do some sell-lease back deals. Buildings on its Arlington Heights campus were put on the block in February 2009.

"But we'll keep the overall footprint," Brown said, saying the company will keep Schaumburg as the Enterprise and Networks headquarters. Other campuses in Libertyville, Arlington Heights and downtown Chicago also will house workers. But Jha was unclear on whether Libertyville would remain the headquarters for the phones business, since it also has operations in other cities, including San Diego, Calif.

The co-CEOS said more details will be available when they make their announcement this summer.

The company continues to target the first quarter of 2011 for the separation to be completed. Each of the new companies is expected to generate about $11 billion in annual revenue.

Shareholders are expected to receive one share each of the new companies for one share they currently own, the executives said.

In February, Motorola announced its long-awaited plan on how it would split up its businesses into two publicly traded companies. One company, headed by Jha, would have the Mobile Devices and the Home businesses. They will continue to focus on wireless handsets and smartphones as well as set-top boxes and other related equipment for cable TV services. The second company would include the Enterprise Mobile and Networks businesses headed by Brown. These businesses will continue to focus on two-way radios and other equipment for government and law enforcement agencies as well as installation and services related to the wireless network infrastructures.