Motorola may shut operations in India in drive to cut 20% jobs

• Posted by Sindhuri G August 30, 2012 - Filed in Business - 2,027 views

  NEW DELHI: US-based Motorola Mobility may shut operations in India as part of its global strategy to prune its near 20,000-strong workforce by 20% and close more than 30 sales offices and R&D units worldwide. The mobile phone maker will also give 'generous' severance packages and outplacement services to employees that will be impacted.

  Industry executives aware of developments at the handset maker's India operations said the employees were being let go and only people working on projects relevant to products being sold in the US market were being retained.
  
  Motorola is scaling down on a large scale in India as it was reducing the number of models in the market and limiting its presence to just smartphones, these people said without wanting to be identified. It would continue to sell its phones till stocks are exhausted while service centers would continue to function.
  
  Motorola Mobility's director for communications in Asia Pacific William Moss did not share specifics or details in response to ET's queries, but confirmed that the global restructuring was impacting India and its workforce, who will be given other employment opportunities apart from compensation.
  
  "India is affected by this global restructuring, but we continue to have operations in India and we will provide support for our devices sold in the market. While we expect this strategy to create new opportunities and help return our mobile devices unit to profitability, we understand how hard these changes will be for the employees concerned. We are committed to helping them through this difficult transition and will be providing generous severance packages, as well as outplacement services to help people find new jobs," he said.
  
  

  

  
  
  Early this month, the loss-making phone maker said it was restructuring its global business to make it leaner and profitable. The move will lead to 4,000 people losing their jobs, two-thirds of which will be outside the US. Its operations in India and Asia would also shrink as an impact of these decisions.
  
  "We also plan to close or consolidate about one-third of our 90 facilities globally, as well as simplify our mobile product portfolio-shifting the emphasis from feature phones to more innovative and profitable devices," Moss added.
  
  Motorola's new chief executive Dennis Woodside was recently quoted that operations in Asia and India, research and development centers in Chicago, Sunnyvale and Beijing would get significantly smaller. He added that Motorola would leave unprofitable markets, stop making low-end phones and concentrate on only a few models, preferably smartphones.
  
  Motorola's India presence has been less than significant which could be the reason of the exodus. It launched around 27 models last year but its market share remained tiny, nowhere near the top 10 mobile phone makers including Nokia, Samsung and Micromax that lead the home market, according to a survey by Voice&Data.
  
  The shake-up in Motorola follows its acquisition by Internet giant Google for $12.5 billion announced a year ago and 18 months of dropping global market share. Reports in international media reveal that since the completion of acquisition in May this year, Google has reduced management size at Motorola by firing around 40 VPs and has instead hired new senior executives. ET could not independently confirm this.
  
  Motorola's 17,000 patents along with its hugely successful Android operating system would be Google's arsenal against Apple and Samsung that lead in key markets.