Zack SpearSales of Motorola cellphones collapsed more than 50 percent this past holiday season, forcing the company to announce that it will eliminate another 4,000 jobs as Apple and other rivals loom in the background.
According to preliminary financial results, Motorola sold only 19 million phones in the fourth quarter, compared to 25.4 million in the third quarter and 40.9 million in the fourth quarter of 2007. The company will announce official figures shortly after the end of the month.
"The actions we are taking today in our Mobile Devices business will allow us to further reduce our cost structure and positions us for improved financial performance in 2009," said co-chief executive Sanjay Jha, who was hired last August to manage the handset division. "Together with these actions and the announcements made in the fourth quarter, the Mobile Devices business expects to recognize annual cost savings of approximately $1.2 billion in 2009."
The news isn't good for the future of Motorola's mobile devices, which have struggled against new products from other companies without a clear successor to the popular but outdated RAZR. Apple's iPhone in the fall overtook Motorola for the top-selling phone in the US despite a major price difference and the limitation of the iPhone to AT&T's network and Apple having sold just 6.9 million iPhones total during its last quarter.
Most Motorola phones are low- to mid-range devices, with most of its smartphones based on Microsoft's Windows Mobile. Its future smartphones are expected to run Google's Linux-based Android platform.
In contrast to the loss-making Mobile Devices group, the company reports that its Enterprise Mobility Solutions and Home and Networks Mobility businesses have fared well.
The last two months have seen Motorola cut 7,000 jobs. and have contributed to a total of about 17,500 eliminated positions in the last half-decade as the company scales back from the heights of its success.  The company employed as many as 150,000 staffers worldwide at the beginning of 2000. Â
At press time, Motorola stock was up 6.33% to $4.37 per share in a reaction to the company's cost-cutting efforts.
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9 Comments
If anyone "bails out" Motorola, they'd need to have their head examined.
I really feel sorry for those that have been axed. Motorola did have some excellent engineers but they've been let down by a string of terrible CEOs.
I've got a feeling that Sanjay Jha will turn things around though. He's got a very good track record from his days at Qualcomm. The measures he's implemented (only 12 devices a year, smartphones based on Android only) are extreme enough that they've got a very good chance of returning to profitability. It doesn't look like they'll be regaining market share any time soon though.
Google also has been laying off employees. It's the market right now, welcome to a recession.
Hope everyone can find a job.
If anyone "bails out" Motorola, they'd need to have their head examined.
Don't really understand that. Who is saying anything about bailing out?
They are simply cutting staff just like about every other company in the world. I never read anything in this article about Motorola being in any financial trouble.
It's good to have a laugh at people losing their jobs I suppose. Will you be laughing if Apple make a similar announcement?
I can remember, 18 years ago, when I graduated college, that Motorola was considered one of the good places to work, if you could get there. Since then the company has been a basket case, constantly downsizing - it would have been a nightmare to have worked there during these years (constant worry about getting layed off, constant harranging to save money)...I can only imagine.
How sad, for a once great US company.