Motorola Back in the Saddle

Motorola's (MOT Quote) third-straight quarterly shortfall has spurred CEO Ed Zander into action.

Deeming the fourth-quarter earnings performance "not acceptable," Zander announced a plan to cut 3,500 middle managers worldwide. Shares rose 3% as investors applauded the company's long-awaited gallop into action.

The layoffs are part of companywide effort to trim $400 million in costs and return Motorola's operating margins to around 13% sometime in the second half of the year, Zander told analysts on a conference call Friday. Margins in the latest quarter sank to less than half that level.

Zander said he and his team were confident they could make changes, but he added that the process was not without challenges. ...