Motorola lays off 5,600 employees in the first quarter, mostly from phone business

Motorola lays off 5,600 employees in the first quarter, mostly from phone business
The recession has divided the cellphone manufacturing business into the haves and the have-nots. The haves might include a company like RIM that has reported good earnings, or MetroPCS which does well when times are tough, and Apple where the iPhone 3G continues to perform well. The have-nots could be represented by a few companies like Motorola. By waiting too long to refresh an aging line-up, the company relied too much on the RAZR and the once powerful cellphone maker soon found itself chasing everyone else. You can blame the economy or you can blame Motorola executives who waited too long to counter what they probably thought was a touchscreen fad, but either way the result is that the company has had to hand out pink slips to employees. Motorola said in a filing Monday that they have laid off 5,600 jobs in the first quarter. Add to that the 1,900 axed in the prior quarter and you get a reduction in the payroll of 7,500 people over the last two quarters with most of the cuts taking place in the phone division. That is 500 more employees cut than the 7,000 planned. When will it end? A Motorola representative says that the company has a target to reduce costs by $1.5 billion dollars and they want to exceed that figure. Last year the company dropped from the third biggest cellphone producer to number 5 and with more red ink on the way, it is up to newly hired Sanjay Jha to turn the cell business around. One thing that Motorola has said they want to do is to produce future handsets using Google's open source Android OS. That might help with the software, but there still is the question of design and hardware and that is something that Motorola's own people will have to figure out before the layoffs can stop and the ink return to black.

source: TheStreet.com

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9 Comments

1. Legion

Posts: 397; Member since: Dec 12, 2008

This saddens me.

2. Dood

Posts: 269; Member since: Mar 23, 2009

I know, right?

3. SellPhones82

Posts: 569; Member since: Dec 11, 2008

This sure doesn't help the unemployment rate. Android could help but all the carries still need to jump on board or it is pointless. A new CEO is a start but they need a new disgn team as bad or even worse. I can't remember the last time I said to myself "That is a good looking Motorola phone". It might have been the StarTac which was only 13 years ago.

4. belve14

Posts: 113; Member since: Mar 31, 2009

If I havent made my point about motorola....they flat out suck.

5. Astromanaught

Posts: 46; Member since: Mar 11, 2009

It starts with making reliable phones that look good. Having owned two motorola products in the last 3 years (a razr2 and a Q) I wont be buying a motorola product untill the quality is 100x better than now. Working in the cellular industry I almost never sell motorola based on how many i see returned. the rokr was the worst phone i've ever seen, with almost a 80% return/manufacture defect rate (those are based on my stores, not official or anything)

8. vzw fanman

Posts: 1977; Member since: Dec 11, 2008

i still have the motorola startac. what a sweet phone that was

6. htsee

Posts: 86; Member since: Mar 15, 2009

My thoughts and prayers go out to these employees and their families... This is definitely not the thread to flame motorola... The economy is brutal, and I hope these employees can bounce back quickly...

7. belve14

Posts: 113; Member since: Mar 31, 2009

You know what you are right I should not have made that comment and I like what you had to say....but alot of motorola business people should know that their products are not making it out there with all these other companies constantly coming out with less defective phone. Its not a secret to them...but I also feel bad for all the people that are losing there jobs homes and etc. The companies that dont produse well will fail at this time in the economy thats just facts bro.

9. YouLostTheGame

Posts: 441; Member since: Dec 11, 2008

Yeah really since the Razr, Moto has just been riding on that phone's success. I have a tendency to think this *could* be the case for Apple when good ol' Mr. Jobs has gone the way of all the earth. Up until his reentry into Apple, the company was sinking! His comeback signaled what we all know (and some love) about Apple today. He was able to innovate the hell outta the industry for whatever reason. But when he dies/no longer has a say in the company, I think Apple may fall back into where they were before ol' Jobsy came on board, and ride the coattails that is/was the success of the iphone. But who knows, that's only my prediction. I'm an avid user of Mac products so I'd hate to see that happen. In any case it sucks when people lose their jobs, but we all know that companies that don't "produ(c)e well" during this time of our economy aren't meant to fail. Just take a look at the outrageous bailouts that are being handed to companies that aren't cutting it today...GM, Chrysler, AIG, Citibank (gov't now owns nearly 40%) etc. Seems to me that if companies can't hack it, Obama is MORE than willing to squander tax payer dollars to governmentalize our business sector!

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