Moto Will Lay Off 4,000 More
The majority of the cuts will come from the Mobile Devices business, which has been steadily losing market share to Apple Inc. (Nasdaq: AAPL), Nokia Corp. (NYSE: NOK), BlackBerry , and Samsung Corp. The division has lost more than $2.7 billion since the start of 2007, and the cuts come in addition to the previously announced reduction of 3,000 jobs.
"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-CEO Sanjay Jha in a statement. "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."
Just a few years ago, Motorola's Razr was a desirable and profitable phone, and it sold more than 110 million units. But the company hasn't brought many innovative cell phones or smartphones to market since then, and its portfolio of handsets is widely seen as stale.
The handset maker fell to fourth place in the global cell phone market last year, and most analysts and mobile phone companies are expecting the market to contract. The Mobile Devices unit became so much of a drag on the company that it was going to be spun off into a separate company.
The spin-off has been put on hold by Jha as the company tries to focus on creating consumer-friendly handsets. Motorola is making a big bet on Google (Nasdaq: GOOG)'s Android operating system for a social network-centric smartphone, but that device isn't expected until the second half of 2009.
— Marin Perez, InformationWeek