Mobile phone maker Motorola has decided to close down its distribution division in India, owing to tumbling sales and aggressive competition. Distribution activities are now likely to be carried out from its Singapore offices.
This decision is in line with the company’s recent 4,000 job cuts, more than 3,000 of which will come from its ailing handset unit. A senior Motorola India official confirmed Motorola's plans to close the unit.
The handset maker has reportedly informed about 150 employees about the move. As of now, few employees in the distribution segment are likely to get pink slips, but there will be a knock-on effect further up the chain, with job cuts in other business segments, including research and development.
Rather stiffly, Motorola told IT Examiner, "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 our 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."
Chopping salespeople is not confined to India, as yesterday it was reported a similar move in the UK, where is has cut its sales team to two.
Motorola yesterday announced plans to lay off a further 4,000 staff, and warned it was likely to report a fourth-quarter loss.
Motorola has been losing out lately to stiff competition in the mobile handset market, with its number two position taken over by Samsung recently. The last quarterly results reflected a drastic slide in its sales on both a year-on-year and a quarter-on-quarter basis. It recorded sales of 19 million units, down from 25.4 million in the previous quarter and 40.9 million units in 2007.
Motorola tasted success on Indian soil with the launch of Moto Razr in 2005, but since then the graph has been in decline. X
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