Mobile phone maker Motorola is to shed 4,000 jobs in an effort to reverse its recent decline. The company plans to close a third of its 90 worldwide offices and industrial properties, cutting its workforce by 20 per cent. Motorola, which was bought by Google in May, anticipates severance packages to cost in the region of $275 million.
Motorola once dominated the mobile phone market but has lost out since the arrival of smartphones. It now plans to develop and concentrate on a small number of high-end models instead of the 27 low-end phones it currently manufactures. The announcement is the first sign of a radical restructuring of the business under Dennis Woodside who previously worked for Google.
He has stated that his aim is to make Motorola phones cool again and that the company has set up an “advanced technology group” including metal scientists, acoustic engineers, and artificial intelligence experts in a bid to return the business to profitability. Motorola has not produced a mass market phone since the Razr and Google reports that the firm has lost money in 14 of the past 16 quarters.
Two thirds of the job losses will be outside the US but Motorola would not confirm if jobs were at risk at any of its UK commercial properties in Swindon, Basingstoke and Livingston. A statement from the company pledged to support those affected by the redundancies including the provision of outplacement services to assist people in finding new employment.
Motorola faces a difficult task trying to regain the market position it once held. Today Apple and Samsung dominate the smartphone business and together they share 90% of its profits. In the first three months of 2012 alone, Samsung sold 93 million handsets. In contrast Motorola reported sales of 9 million devices over the same period which includes only 5.1 million smartphones.
