Motorola ( MOT) said Friday it will cut 3,500 jobs as it seeks to bounce back from a disappointing fourth-quarter earnings performance.

CEO Ed Zander said the Schaumburg, Ill., wireless titan is "going to flatten some layers aimed at middle management" in the wake of an earnings shortfall that stemmed from a poor showing at its handset division. Motorola picked up market share during the quarter -- but primarily by selling cheap or deeply discounted phones, pressuring its bottom line.

"We are going to take some actions, starting today," Zander said. He said the cutback will reduce annual costs by $400 million.

"We got to get back on the horse in financial execution," Zander told analysts on a midmorning conference call.

Earlier Friday, Motorola posted a drop in fourth-quarter profit, just two weeks after the company warned Wall Street that soft handset pricing would lead to a steep earnings shortfall.

Shares rose 36 cents to $19.07.