Motorola has said that it will be laying off 4,000 workers in 2009, with most of the cuts (3,000) coming from the failing mobile phone division. These are expected to begin immediately, and come on top of the 3,000 job reduction that was announced during Q4 2008.
Motorola has been in trouble for sometime now. While it has had profitable areas, all of them have been drag down because of its mobile phone division’s non-successful period after the RAZR phone was released. While it also tried to capitalised on the RAZR name, they also did not meet up to the same level of customer appreciation as the RAZR itself.
In fact, it was the no. 1 mobile phone for more than 4 years, before being moved down because of the successful Apple iPhone.
I think consumers are looking into more feature packed phones, that feature cool features like a MP3 player, internet browsing and a camera; while also looking for a phone with a cool design. Consumers don’t want to replace their MP3 player or laptop with a phone, but want to have the necessary access to it if they don’t happen to have it with them at the time.
Motorola also has a long way to get back from its slump; as Nokia still releases many phones, and its popular ones turn out to be the N Series (have you seen the Nokia N97, I mean that looks better than the RAZR). Also, it faces competition from the smartphones, with Palm and BlackBerry bringing out phones that are more consumer friendly but also attracts business customers. And we can’t forget Apple.
This brings the total number of job cuts from Motorola to 7,000. The job cuts come as it expects the Q4 2008 results to show a net loss of between $0.07 and $0.08 per share; but we won’t know until February 3.