Motorola to shut down sales unit
Move Forced By Dwindling Sales, Rising Competition; Division Will Now Operate Out Of S'pore Rashmi Pratap & Leena Mulchandani MUMBAI TROUBLED handset maker Motorola is shutting down its distribution division in India amid dwindling sales and increasing competition in the world's fastest-growing telecom market. The distribution work will now be done out of Singapore, industry sources told ET. While it is not known how many people worked in the division and will have to quit, 150 people have been already informed. "While the layoffs are currently restricted to a few people in the distribution segment, it could soon extend to other divisions in India, including research and development," sources said. Motorola is "outplacing" these employees to other handset companies as well as telecom operators. In a first of its kind, Motorola is going to conduct interviews on its campus where potential recruiters can hire its people, said Motorola employees who will appear for interviews beginning next week. This is in sharp contrast to the company's vision for India and emerging markets three years ago. In August 2005, Motorola had established India as the headquarters for high growth markets as it was focusing on lower-tier products. It was then investing heavily in marketing campaigns and in expanding distribution through partners as well as on its own. However, the US-based firm, which took the Indian mobile market by storm when it launched 'Razr' in 2005, has failed to repeat that success here as well as globally. It had planned to spin off the handset business, but has now postponed it. Globally, Motorola has announced 4,000 job cuts in the mobile division as well as other businesses. This is in addition to 6,700 jobs cut in 2008. In response to an e-mail from ET, Motorola said, "While Motorola has a strong global brand as well as a solid balance sheet and cash position, the company is not immune to the currently weak global economy. Motorola continuously reviews its business and the market to ensure that our resources are aligned with market conditions, and that we are focused on our top strategic priorities. We are working diligently to improve the profitability of our business and are committed to delivering a strong portfolio of exciting new products in 2009 and beyond." The company has lost its number two position in the global handset market to Samsung. For the December 2008 quarter, it reported sales of 19 million units, down from 25.4 million in the third quarter. The corresponding number for 2007 was 40.9 million. Motorola India has also been seeing exodus of some top executives in the past few months following uncertainty about the mobile division's future. The company's senior director for sales and marketing (mobile devices) Lloyd Mathias put in his papers last month to join Tata Teleservices, while corporate VP & MD for software and services Mohan Kumar quit to join Norwest Venture Partners. Its country president Firdose Vandrevala had also left the company to head Hiranandani Constructions in 2007. * VOICE DROP **Henceforth, the *distribution work of the company will be undertaken in Singapore *Though there *is still no clear picture on the layoffs, it could well spill over to other divisions *This stands *in sharp contrast to the situation 3 years ago when the company had mega plans for India *Since the *launch of 'Razr' in 2005, the US-based firm has failed to repeat the success story --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en -~----------~----~----~----~------~----~------~--~---
