Motorola (MOT) cut another 4,000 people on top of its earlier "down-sizing" to knock out another $600 million in costs. The company said all the usual things about making money for shareholders and having quality products.
But, the action has to be taken as a bad sign. If there were any recovery on the horizon for Motorola’s handset business, pushing out so many people would probably be less likely. Motorola’s global handset market share is now about 17% and rival Nokia stands at 36%. Nokia has said that it may be able to push that figure to 40% in the near future.
The ongoing diaspora of Motorola’s talent would seem to be an endorsement of the position that Carl Icahn took when he pushed to join the company’s board. Motorola’s 2005/2006 stock run-up was based on a one-trick pony, the RAZR. Motorola had no firm plans to replace it or to make less expensive phones for emerging markets like Indian and China where Nokia’s market share is close to 50%.
Motorola CEO Ed Zander looks like a bit of a fool, but he is not losing his jon.
As is usually true with companies that fire people. the stock is up after hours
Douglas A. McIntyre
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