Listen up. After months of quiet, you'll hear some stirring at Motorola (NYSE: MOT ) .
It's been nine long months since Ed Zander took the job as Motorola CEO. This week he finally made his first real move to improve the technology giant's performance, reducing headcount at three of Motorola's divisions. Frustrated investors take heart; this could be the start of much-needed fixing at Motorola.
According to a federal filing released yesterday, Motorola says it will cut 1,000 jobs and take a $50 million charge to cover severance pay costs. Most of the cuts will come from the company's solutions unit, its electronics systems division, and its broadband segment. Motorola's mobile handset unit will be left alone.
The change isn't huge, but it could offer clues about the direction of Zander's strategy. Mobile communications will likely play a lead role going forward. The future of Motorola's other units is less certain.
It's not clear whether Motorola's broadband unit, which makes set-top boxes and modems, is worth keeping. A nearly $3 billion business when acquired in 1999, it will fight to pull in more than $2 billion in 2004. Steadily losing market share to rival Scientific Atlanta (NYSE: SFA ) , the broadband unit could go the way of Motorola's semiconductor business, spun off earlier this year as Freescale Semiconductors (NYSE: FSL ) .
Changes could be in store at Global Telecom Solutions, which sells wireless network infrastructure. Its share of the market ranks well behind Ericsson (Nasdaq: ERICY ) and Nortel (NYSE: NT ) . At the same time, almost 40% of the unit's sales come from just three customers in the developing world, leaving Motorola heavily exposed to financial uncertainty in those risky markets.
While Motorola's handset business goes untouched, it faces a tough road ahead. As well as engaging in hand-to-hand combat with market giant Nokia (NYSE: NOK ) , Motorola must fend off Samsung,which has increased the learning curve on design and production and is closing in on second place.
At $17.80, Motorola shares are priced roughly where they were when Zander took the helm. With little news until now, that makes sense. If this week's change is nothing more than a bit of rustling, Motorola's record of frustrating investors won't be in jeopardy.
Fool contributorBen McClurehails from the Great White North. Ben doesn't own any shares mentioned here.