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LIBERTYVILLE, Ill. (CBS.MW) -- Motorola, in a continuing effort to turn around its flagging wireless handset business, on Tuesday said it would cut 7,000 more jobs in the group, bringing the total head count reduction to 12,000 since December.

To reflect the cuts, which will happen over the next two quarters, Motorola will take a first- and second-quarter special-item charge, though it did not divulge the amount. Analysts polled by First Call/Thomson Financial are expecting Motorola to lose 7 cents a share in the March quarter and 1 cent a share in the June quarter.

As with many wireless phone manufacturers, Motorola is finding it difficult to find new buyers and the rate of replacement for cell phones has slowed. As such, the job cuts and other measures are designed to slash costs in the unit.

Motorola's troubles have affected such companies as Texas Instruments , which makes the majority of chips for wireless handsets. Because Motorola has too much inventory, TI can't ship as many of its chipsets as it had once hoped. On Feb. 26, TI warned that its revenue would be 20 percent lower in the first quarter than in the fourth. Initially, TI said that revenue would come in 10 percent lower on a sequential basis.

In a statement Monday, Motorola said it anticipates growth but at a slower rate. The company said it would continue to develop new products and technologies that would support the long-term health of the business. The market has been looking forward to the next generation of cell phones, which will have virtually all of the capabilities of a personal computer, albeit on a smaller scale.

"We must continue to adapt our overall cost structure, work force and production levels to a more competitive business model," said Mike Zafirovski, president of Motorola's personal communications group.

He noted that Motorola grew its share of shipments worldwide by about 1 percent to 14.4 percent between the third and fourth quarters of 2000, the first increase in several years.

Morningstar analyst Todd Bernier praised Motorola's decision. In a firm note, he said that the company must cut costs to compete with the leader in the wireless handset industry, Nokia.

"We think this decision is the right one in the long run; combined with production outsourcing, it gives Motorola a chance to become a more streamlined and flexible cell-phone maker," he stated.

Shares of Motorola lost 3 cents to trade at $14.97 after the announcement. The stock is well off its 52-week high of $57.11 reached on March 14, 2000. The shares hit a 52-week low of $14.85 on Monday.

Lisa Sanders is a Dallas-based reporter for CBS.MarketWatch.com.

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Fair Use Act Quotation, for research purposes only (perry@ofuzzy1.com), March 13, 2001