Motorola to lay off 4,000 starting immediately

It's official: Moto's pulling out the axe. The beleaguered manufacturer is no stranger to financial struggles at this point -- nor layoffs, for that matter -- but the latest round cuts some 6 percent of employees from Moto's global operations, and 3,000 of the 4,000 will come directly from the handset division. The news comes along with a preliminary fourth quarter earnings estimate of a 7 to 8 cent per share loss (which isn't really "earnings" when you think about it), so yeah, it's business as usual out in Schaumburg: get lean and start making awesome products. Soon, Moto. Please.

[Via Boy Genius Report]

[ILoveApple @ Jan 14th 2009 5:40PM]

What kind of black magic is this? Two posts have been made after the Steve Jobs story and yet it's still at the top?

[go seki @ Jan 14th 2009 5:54PM]

you got the odds on Jobs in the Dead Pool yet?
-
On the Moto Story .. I don't see the Aura saving Moto phone business but the MotoSurf just might ..

[E71 @ Jan 15th 2009 1:24AM]

They should get rid of the Co-CEO Sanjay Jha. That should save the company quite a bit of money.

Viva la resistance!

[va jj @ Jan 14th 2009 5:50PM]

that should be their new logo.

[tekdroid @ Jan 15th 2009 11:01AM]

har :)
well, I would HOPE SO :)

Motorola engineering:
"we love to put that M logo right in your EAR!"

Motorola Marketing:
"yes, yes, more classic M logos at the earpiece! Can't get enough!"

[Dee @ Jan 14th 2009 5:51PM]

That sucks for those losing their jobs, especially coming into the new year.
Good luck to you all finding new jobs.

[Aaron @ Jan 14th 2009 5:55PM]

4,000 axed at Motorola = 5 comments
1 person taking a break at Apple = 170 comments

:)

[The WC @ Jan 14th 2009 5:58PM]

But how important are those 4,000 people to Motorola? How important is that one person to Apple?

Sad but true, man, sad but true.

[va jj @ Jan 14th 2009 6:01PM]

well this is CEO vs employees.

[EI8HT @ Jan 14th 2009 6:45PM]

here's the difference:

steve jobs (apple) makes great things that make peoples lives better

motorola (and unfortunately 4000 employees) makes shit which makes people pissed off that they ever bought something from them in the first place

you gotta feel bad about the layoffs (and steve for that matter), but honestly, who cares about motorola?

[??? @ Jan 14th 2009 6:10PM]

Am I the only one who finds it hilarious that in the past hour, there's only 4 comments here, while everyone else is going nuts about the other news story that came out at the same time?

[??? @ Jan 14th 2009 6:11PM]

Aww, hell, that's what I get for forgetting to confirm the comment.

[Herbie555 @ Jan 14th 2009 6:10PM]

Mobile Phones is a weird sales business. Almost all mobile phones are really "fleet sales", as you put it, because so much work has to be done to get a phone cleared for a particular carrier.

The vast majority of phones sold by Motorola (and most other manufacturers) are sold to the carriers first, and then re-sold to the customers. Even the phones you buy online though places like Amazon, etc. have often been "passed through" the carrier.
The remaining phones that get purchased outright by a user and then activated on a particular network as a small fraction.

The temptation is to see the carriers as the customers, since they're the ones writing the cheques, but the hard reality is that market demand, though "filtered" by the carriers, is still driven by the phones that individual end-customers choose to take home. So yes, Motorola must make major improvements to their phones both in terms of the initial "wow" that gets customers to want the hardware and in terms of the long-term usability that keeps a user coming back for more Motorola products.

With the sales juggernaut that the RAZR represented, Motorola should have had a massive leg up in returning customer purchases. And they probably would have, if only the majority of experiences had been positive. (i.e. my last phone was a Motorola, and I really liked it, so I'm predisposed to get another Motorola). Sadly, most experiences were negative. (i.e. My last phone was a Motorola and the software sucked, so I'm going to look for anything BUT a Motorola for my next phone).

A large part of the problem is the Motorola corporate culture. Motorola sees itself as a manufacturer of hardware, and hardware only. Software of any kind (this seems to be true across many divisions) is looked upon as just another component, a part# that must be included in the product build before you can ship, and one that should be cost-engineered just as aggressively as if it were a capacitor, a chip, or the battery connector. Motorola does not perceive itself to be a "software company", and thus tends to not look for ways to be innovative with respect to software.

The software in the RAZR 1 wasn't "bad", at least not when it was used in the V60, the V600, etc., but by the time the RAZR was in mass sales, it was extremely dated and lacking in features compared to the competition. Moving to a firmware platform like Android is another example. However promising Android may be, I would bet hard money that the choice to use it was not based on optimistic dreams about all the cool things that could be done with it, but instead based on a cold cost-analysis of "buying" yet another part that had all the features Motorola perceived it needed. The cost-per-unit and integration costs will have been weighed against a cost-estimate of upgrading existing in-house and reference design firmware to a similar specification.

[nick @ Jan 14th 2009 6:10PM]

You know, Engadget has extended advice to people like Palm in the form of letters from the editor, I wonder if something could be in order for Motorola? This company, despite what people may think, is not devoid of talent, and could conceivably come back from the brink in the mobile phone industry. Another thing that isn't often mentioned here, Motorola actually has fairly good brand recognition. The fact that the Razr was so popular for so long, plus the myriad of commercials, have kind of made 'Hello Moto' a household name. They need a solid handset that is capable and sturdy.

1)9-10 hours of talk time.
2)Sturdy Metal construction.
3)Candybar design with hard to scratch screen.
4)Decent onboard memory (4gb sounds about right)
5)Support for SDHC/SD storage.
7)Excellent reception and speaker (nothing like a phone that sounds nice when it rings, loud and clear).
8) Support GSM 3G, EVDO, HSPA etc..
Price it at about 75 dollars.

[Fanfoot @ Jan 14th 2009 6:36PM]

I agree that a letter to Motorola from Engadget would be a good thing for Engadget to consider a la Palm. I don't know how much difference it actually made to Palm, but Motorola could obviously use some advice.

They need to start making what people think of as cool phones.

Why is LG the only one building a watch phone? Forget all the smartphone/media crap. Just do a basic phone with contacts and a way to sync it, paired up with a bluetooth headset and don't sell it for too much. It might sell like gangbusters.

If they're going to put all their eggs in the Android basket, then they need to have software engineers working on making Android better. It isn't clear yet that Android is going to be great, but it certainly has the potential. And don't cheap out on the hardware of the first phone please--part of the reason that Pre looks so good is the processor is FAST. And its that speed as well as some of the visual touches that make the touchscreen usable.

Don't make the assumption that smartphones are all people are going to buy. They'll certainly be the racecars in your lineup, but unless Motorola wants to go the Palm/BlackBerry route of all smartphones all the time, they'll need to have some cool simpler phones for the majority of the people who buy these things. Unless it turns out you can't make any money selling such things anymore. This is part of what they need to think about really hard--what is their identity now? What will happen to smartphone sales in the downturned economy?

Do SOMETHING to distinguish yourselves. Maybe its building great cameras with really good optics into your cameras. Maybe its crystal talk and things like it. Maybe its both.

Get off the frickin' fence. If they're going with Android go with it, and forget Windows Mobile. Or if they know something we don't and WM7+ are going to be something great (doubt it but...) then do that. Pick ONE.

Stop being such a f'in pansy. If you build a function into your hardware and Verizon wants to turn it off, don't sell it to them.

[moto-man @ Jan 17th 2009 7:55AM]

Motorola will not be able to come back in the handset field as they are now just to far behind and being one of the people put off in November the roadmap lacks any fair dink'em products

Motorola doesn't do the basics which is listen to the customer, Sorry but mobile will not be the gold egg for Moto

[TSX @ Jan 14th 2009 6:15PM]

Motorola needs to pull a Palm out of its ass - add some lube to speed it up for good measure.

[bandigolo @ Jan 14th 2009 6:34PM]

woah woah woah... the Aura didn't save these people's jobs? Man, I thought that would really turn the company around...

[Fanfoot @ Jan 14th 2009 6:36PM]

Yeah, is that thing a joke or what?

[michaelportent @ Jan 14th 2009 6:43PM]

They milked the Razr dry and let their R&D department go on an extravagant, indefinite vacation. Nice work, guys.

[Herbie555 @ Jan 14th 2009 6:57PM]

That's where you're wrong. See my comment above. Motorola doesn't do R&D, at least not in the traditional sense. The birth of the RAZR was the (well documented) story of an internal coup by a relatively small team, not the end result of focused investment.

Motorola does COST engineering. "Drive another $1.35 out of the BOM cost by sourcing the capacitors from Vendor B instead of Vendor A. Firmware just another part# on the BOM and not where you make or lose money or customers."

[ReekinHavok @ Jan 14th 2009 7:25PM]

Did the run out of colors for the Razr?

[Alex Linhares @ Jan 14th 2009 8:13PM]

Oh-Oh, Moto.

The only way motorola can get out is to bring out skype and f*ck the carriers. Instead, they decide to stick it in the customers and please the carriers (like some others). So I hope Motorola either changes strategy or dies a slow painful well deserved Shumpeterian death.

[Robocellkid @ Jan 14th 2009 9:04PM]

Hey Engadget, I would just like to thank you for your support of Moto throughout your posts. Its nice to see some optimism when everyone else just continues to bash Moto and the RAZR.

[lee82gx @ Jan 15th 2009 2:02AM]

The title of this 'news' is wrong:

Motorola to layoff 4000 THIS QUARTER. More to come if situation doesn't improve.

[tekdroid @ Jan 15th 2009 11:17AM]

If I worked at Motorola, I'd be that exec that said the Razr would never fly. I'd be the exec that poo-poos every boutique phone suggestion stating that market segmentation based on looks, fads and fashion is 'downright silly' especially when favoured over sound quality and reception quality.

So, given that I would run the company into the ground by insisting on high-value and usability, and have little regard for what else people respond to, and how a phone reflects on their perceived status, or indeed what they choose to spend laughable sums of money on... considering all that, I am in favour of management enacting the first steps in Motorola's long and fruitful ride to the top (?) of the fickle handset biz. :)

[MotoSpouse @ Jan 15th 2009 11:20AM]

As the wife of a Motorola employee who is IN the handset group, this news is very upsetting. If my husband is not laid-off then many of his friends/co-workers will be let go. To EI8HT - I think everyone who has a loved one that works at Motorola cares about the company. Very talented and hard working people will be let go, not just the slackers. I know for a fact that the employees in the handset group work VERY hard to try and make changes but it can an uphill battle in that company.

[Gary @ Jan 15th 2009 1:35PM]

The problem with Motorola is they always felt they were too big to fail. Like IBM, they thought they had a monopoly on everything from cell phones to public safety radio equipment. Then other brands came along and challenged them through technological advances, while Motorola kept making the same crap using the same old technology and charging a fortune (through proprietary software, code, and other means). Now the hens have come home to roost, and it is ashame that they didn't innovate as fast as other companies did. Another American icon slowly fading away.

[ex @ Jan 15th 2009 4:34PM]

sorry for the ones getting affected by cuts. the reasons for it:
1. bad management making stupid decisions.
2. outsourcing.

[adam hartung @ Jan 16th 2009 12:22AM]

If you can't grow, what are you worth? Business is about allocating resources to growth opportunities, and layoffs indicate you can't grow. Layoffs are an admission of no growth plans, and that means you are heading straight into the Swamp. Read more at http://www.thephoenixprinciple.com

[T @ Jan 16th 2009 8:50PM]

I used to work at Moto, and I finally left after 3 failed phone development projects. The problem was the inept mid to upper management who are more concerned with politics and turf fighting than supporting the hard working low level employees in creating cool (customer-desired) phones. Yeah, the RAZR project was a great trail-blazing project/product. If the company is going to survive, they need to do some cleaning house of a lot of this bad management / corporate culture. There were WAY to many VPs when I was there: layers and layers and layers. I agree with the MotoSpouse in that there are a lot of really smart and talented people who will probably lose their jobs, and that is truly sad. I feel bad for my friends who are still there.

[Tygris @ Jan 16th 2009 11:16PM]

Thats to bad. I loved my Krazr but had to get a Rokr when I swiched carriers.....and the Rokr was an AWSOME phone, but it just stopped working. I noticed the company I deal with now only carries the razr2 I believe. I think Motorlla really needs to think about adding qwerty keypads to their phones, that's whats killing them.

[JobOutlets @ Jan 19th 2009 11:18AM]

Everyone is expecting recession getting over soon. I have a very close friend, who graduated from Harvard. Worked for ML for over 8 years, recently he’s been “right sized” too, despite of his outstanding performance and the increasing revenue he generated. OMG, now the banking industry is badly hurt, how long it would take for those financial background guys like him get back to the job market. Banking jobs are not there as much as before as easily seen on http://www.joboutlets.com and other job sites in the region