Motorola to cease mobile phone production in Singapore

SINGAPORE--According to a statement issued Wednesday, Motorola will stop making mobile phones in Singapore.

"The phased transition is scheduled to begin during the second quarter and is expected to be completed by year end."

The move will affect approximately 700 permanent staff based in Singapore and is part of a global US$500 million cost-reduction initiative announced earlier.

"Eligible employees are being provided with severance packages and outplacement support," said Motorola, although it did not reveal further details on the severance package at press time.

The US manufacturer will still continue to base its Asia-Pacific operational headquarters in Singapore. Other key offices in the region include those in Beijing, Hong Kong and Delhi.

The announcement comes after the company's decision last week to split its business into two financially independant entities.

According to figures released Monday by research house IDC, Motorola dropped a place to No. 3 in the Asia-Pacific mobile phone market.