UPDATE 3-Logitech cuts jobs, abandons targets

* Withdraws fiscal 2009 financial targets

* Growth rate in fiscal 2010 seen below previous years

* Shares fall 3.7 percent

(Adds chairman's, analyst comment; shares, details)

By Jason Rhodes

ZURICH, Jan 6 Logitech LOGN.VX plans to cut some 5 percent of its global workforce and abandoned its fiscal 2009 targets after consumers cut back on Christmas spending, the world's largest computer mouse maker said on Tuesday.

The cuts, which amount to 500 jobs or 15 percent of the company's salaried workforce, would be in sales, marketing, legal and IT departments and did not include workers involved in manufacturing, a spokesman for the group said.

Shares traded 4.05 percent lower at 17.28 Swiss francs at 1141 GMT, paring losses after slipping to an earlier low of 15.60 francs, as investors took some comfort from the group's drive to cut costs.

"The initial reaction was understandable, but the shares' recovery shows that there was a lot of bad stuff priced in already," a trader said.

Logitech, which also makes speakers, webcams and keyboards, said the retail environment had deteriorated significantly during the December quarter and the economic environment was likely to deteriorate further in coming months.

"Basically, the immediate action taken by the management is the right step to counteract the deteriorating environment," said analysts at Julius Baer.

The technology sector has been hit hard by the economic downturn with worried consumers tightening their belts, leading to job cuts at other companies like Sony (6758.T), Philips (PHG.AS) and Motorola MOT.N in recent weeks.

And retailers in the United States and the UK are struggling as shoppers worry about spiralling unemployment, tumbling stock portfolios as well as falling house prices and a deep recession.

Logitech Chairman Guerrino De Luca told Reuters Christmas sales had been worse than expected and Chief Executive Gerald Quindlen said in a statement customers had cut inventory levels as consumers turned more cautious about spending.

De Luca also said it was a "fair assumption" sales and earnings growth in its fiscal year ending March 31, 2010 would be nothing like they were in years prior to fiscal 2009.

Logitech, which will book a restructuring charge in the fourth quarter of fiscal 2009, said it would give a business update with its third-quarter results on Jan. 20 and that it expects savings from the restructuring to begin in the first quarter of fiscal 2010.

Logitech in October cut its growth forecast for sales and operating income in fiscal 2009 from 15 percent each to 6-8 percent and 3-5 percent, respectively.

Logitech said on Tuesday, however, it was well positioned to cope with the crisis thanks to its strong cash position and the fact that it has no debt. (Additional reporting by Andrew Thompson, Sam Cage and Katie Reid; Editing by Hans Peters)