Motorola, the makers of the popular RAZR phone line, has announced that it will be axing 3,000 people in 2009 to make savings up to US$800 million, with many of the cuts affecting two-thirds of employees in its handset division. The layouts, according to ComputerWorld, will happen across its operations around the world, and across all of its businesses.
The reasoning for the major cuts in its handset division is that the division was not profitable, with many of its newer phones failing, and its RAZR successor phones failing to get a stake in the market. According to its third-quarter earnings, that division was down 31 percent from last year, with an operating loss of US$840 million.
Meanwhile, its Home and Networks division was down 1 percent from last year, but its operating earnings increased to $263 million, an increase of 65 percent compared to last year. Its Enterprise Mobility Solutions division was up 4 percent from a year ago, and its operating earnings increased to $403 million – a 23 percent increase from last year.
“While our strategic intent to separate the company remains intact, we are no longer targeting the third quarter of 2009, primarily due to the macro-economic environment, stresses in the financial markets and the changes underway in Mobile Devices,” Sanjay Jha, co-CEO of Motorola and CEO of its Mobile Devices division.
“We have made progress on various elements of the separation plan and will continue to prepare for a potential transaction at the appropriate timeframe that serves the best interests of the company and its shareholders.”
“As part of our plan to rebuild Mobile Devices, we have announced significant actions to accelerate the consolidation of our product platforms and refocus our investment and market priorities. These efforts will result in a leaner organization with a more competitive and cost-effective product portfolio."