Motorola cuts up to 800 HK jobs


The cuts are more bad news for Hong Kong, where the jobless rate is at its worst in two years

HONG KONG, China -- Motorola Inc. is cutting between 700 and 800 jobs at its chip testing plant in Hong Kong, the company said Monday.

The cell-phone maker is shifting the production and assembly to its factories in Kuala Lumpur, Malaysia, and in Tianjin, China, the port city closest to Beijing.

A Motorola spokeswoman said the jobs would be cut by the end of this year, dealing another blow to Hong Kong's economy.

Hong Kong's unemployment rate hit 5.8 percent in the period through November, the highest in two years. The government is warning of more pain.

Motorola employs around 2,000 staff in the former British colony. It has about 3,500 chip workers in KL and around 1,500 at the new Tianjin plant.

"The rationale is really just to consolidate our manufacturing in a few places," spokeswoman Gloria Shiu told Reuters news agency. "We are concentrating on Kuala Lumpur and Tianjin because there is more room to grow."

Motorola is shedding around one-third of its work force, or almost 50,000 jobs, around the world. It is cutting 9,400 workers in the United States alone, in an effort to work its way back into the black.

Although chip stocks have rallied so far in 2002, suggesting strong demand from Motorola and other companies that use chips in their products.

But the signs are still unclear as to where the technology demand is coming back. Hynix Semiconductor, based in Seoul, South Korea, cited strong computer growth in China when it raised chip prices last week.

Economists are watching for signs as to whether the United States economy has bottomed out and is starting to rebound.