Motorola to carry out layoff plan
Last week, Motorola announced a plan to cut 3,000 workers worldwide, with nearly 2,000 from its handset division. The announcement came after the firm disclosed a disappointing third quarter result, in which net losses amounted to 397 million, compared with a profit of 60 million last year. The company said on October 3 that it would cut the number of its employees in China as part of a global layoff plan amid financial turmoil.
Chen Lei, spokesman for Motorola China said that the company is recently under an international evaluation of its Chinese operations, which is aimed at reducing costs and streamlining its products. He noted that after a planned restructuring is completed, Motorola’s arm in China will get more resources from its headquarters in the United States.
Motorola’s share in the global handset market shrank to 8.4 percent in the third quarter of this year, influenced by its inability to extend the success of its Razr mobile phone. That is down from 9.5 percent in the second quarter and 22.4 percent in 2006, according to research firm Strategy Analytics.
The company also has been facing the fierce competition by market leader Nokia and a rising number of domestic vendors and private handset makers. Its market share in China dropped to less than 10 percent this year from nearly 20 percent in 2006, according to research firm GFK China. What is worse, it said that such terrible performance have led the resignation of Re Weiguang, head of Motorola’s mobile business in China, at the end of last month.
Earlier this year, Motorola announced its decision to spin off its mobile division to turn around its handset business. But driven by the financial crisis, the survival plan has been clouded. Pang Jun, analyst from GFK China, said the long-term effects of Motorola’s layoff plan are still unclear, but the move can at least stem its bleeding in the short-term. And the impact of financial crisis will be laid on all mobile phone makers.
He still further noted that the growth of the mobile phone market in China has dropped a lot and the rate might be even lower in 2009.
Are you interested in the business opportunities in China?
China is one of the world’s great growth markets and is likely to be for many years to come. Foreign companies often face difficulties in assessing Chinese market demand and enacting effective strategies because of the language barriers, culture differences, and high expense.
BPOVIA is the leading virtual assistant and Knowledge process outsourcing (KPO) service provider in China. BPOVIA is the only virtual assistant company ever been nominated for the prestigious “Red Herring 100 Asia” Awards 2008. Combines international perspective with local know-how, BPOVIA can provide our clients China business development service and help our clients doing successful business in China.
Please visit http://www.BPOVIA.com/ for details about our service.
Popularity: 7%