The ailing handset maker said it took the measures to save more than the $800 million it announced in October.
First, Motorola will permanently freeze its U.S. pension plans. Employees and retirees who have vested benefits still will receive those, but they won’t be able to accrue more after March 1, 2009.
Next, on Jan. 1, Motorola will temporarily suspend matching contributions to employees’ retirement funds. The company did not say how long it will be before it starts matching again.
Finally, workers in most Motorola markets will not get raises in 2009. Co-chief executive officers Greg Brown and Sanjay Jha apparently are trying to help lessen the blow by taking voluntary 25 percent cuts in their base salaries for next year. (Of course, for Brown, 25 percent of $10 million is still a ton of dough; Jha’s base is no less than $1.2 million.)
Brown also will pass on any 2008 cash bonus. Jha’s contract calls for a guaranteed cash bonus for this year, but Motorola said he’ll reduce the amount to equal Brown’s forfeited bonus and take the rest in restricted stock units.
In a joint statement, Brown and Jha blamed the “sustained downturn in the global economy” for the cost-cutting measures. But it’s a pretty sure bet that years of mismanagement (think Ed Zander) and declining status in the handset market are to blame as well.