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Two-Pronged Initiative At Motorola: Layoffs And Better Smartphones

Motorola is embarking on a drive to shore up profits by laying off 5% of its workforce amid a new drive to stimulate demand for high-end smartphones.

The company announced the developments at a Wall Street analysts meeting in the wake of reporting a 48% drop in profits Friday. In its fourth-quarter financial report, Motorola said net earnings declined to $624 million from $1.2 billion in the previous year's fourth quarter. Sales revenue for the quarter jumped 17% to $11.79 billion.

"We are disappointed with our fourth-quarter operating earnings performance," said chief executive Ed Zander in a statement. "However, the company generated strong revenue growth and met or exceeded our goals in many areas during the quarter."

Stock market analysts covering the company focused on demand for Motorola's Razr. Zander said sales of the popular handset remain robust, while some analysts complained that prices for the Razr were falling. Moreover, the industry is focusing warily on competition looming from Apple's iPhone smartphone, which is due to be delivered in June.

A keynote speaker at the Consumer Electronics Show earlier this month, Zander came away from the Las Vegas show more determined than ever to boost Motorola's efforts in mobile communications, according to media reports. Motorola's mobile phone chief, Ron Garriques, said the company has several advanced smartphones in its pipeline.

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