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Adith Charlie
Thomas K. Thomas

Mumbai/New Delhi, Dec. 16

In what could be termed as the first instance of job cuts in the Indian telecom space, US mobile phones maker Motorola is learned to have issued pink slips to at least 100 of its 4,000 employees in India.

This move is a part of the Illinois-based company’s earlier announced strategy of slashing 3,000 jobs, or about 5 per cent of its global workforce.

A company spokesperson 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.”

Company sources told Business Line that the job cuts – which have been largely across the board – was on the cards for quite some time. A formal list of ‘laid off employees’ was circulated in its India offices on Tuesday, they said.

Several software engineers, Vice-Presidents and persons from the company’s sales and marketing division have been targeted in this move, sources said. Of the 100 persons, at least 40 were a part of the company’s sales and marketing team, they said.

Motorola had announced plans to slash 3,000 jobs on October 31 this year while announcing a third quarter net loss of $397 million (Rs 1,929 crore), as compared with a net profit of $60 million (Rs 294 crore) recorded in the year-ago period.

Motorola’s worldwide handset share dropped in the third quarter of 2008 as sales fell to 24.6 million units, as compared with 37.8 million units in the year-ago period, according to a research by Gartner Inc.

“The economic environment is particularly difficult for Motorola because its lack of compelling products and competitors’ aggressive pricing called for price adjustments that it cannot afford if it wants to please investors by retaining margins,” Ms Carolina Milanesi, research director for mobile devices at Gartner, said in the report.

“We expect Motorola’s issues to continue well into 2009…” said Ms Milanesi.

Even in India, Motorola’s market share in the handset and telecom gear market has been declining. According to various analyst reports, Motorola`s market share in India`s handset market dropped to 5.9 per cent as on June 2008. Finland-based Nokia leads the pack with a market share of 59.5 per cent.

However, Motorola is working “diligently to improve the profitability of its business and is committed to delivering a strong portfolio of exciting new products in 2009 and beyond,” the company spokesperson said.

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