RealTime IT News

Moto layoffs may be more like 6,000

Motorola indicated during its earnings report last week it was continuing to trim staff and this week it confirmed it is laying off 3,000 employees, a "little over two thirds" coming from the handset division.

But a Motorola employee, not working in the handset division, has shared with InternetNews.com that employees believe the number will be more like a 10% workforce reduction -- more along the lines of 6,600 layoffs by early next year given Motorola currently has 66,000 employees.

Given its dismal third quarter, and the fact that things probably won't get much better til mid 2009, it's not surprising Motorola is reducing staff and trying to shore up efficiencies.

Nokia announced today it's making similar moves, though just about 600 employees, all abroad, will be impacted by reorganization efforts and a product focus shift going forward.

For months it seemed smartphone and handset players were immune to the macroeconomics hitting everyone pretty hard, but clearly even big boys like Nokia are feeling some heat.

Research in Motion may have had a huge party last week to welcome its Bold to market today but analysts are expecting RIM to have rocky times as well as consumers cut back or postpone making new handset purchases.

The fourth quarter will be enlightening given all the plans various vendors have been pushing forward this year.

In mid year Motorola said it would have 25 new devices in market by year's end and that's likely not going to be realized. RIM had to delay its Bold arrival by a month which could end up being a huge factor in holiday sales.

Even Apple isn't going unscathed. Analysts reported yesterday that production cuts could be near 40 percent, not the 10 percent initially expected. That means demand is ebbing.

As T-Mobile, HTC and Google refused to provide insight on the G1 sales it's hard to assess whether the newest smarthphone is doing well in such turbulent times.

The buzz initially said it was over sold and exceeded sales expectations, but I sort of doubt that as there would likely be some indicators from the Android community that the G1 was breaking records.

It will be interesting to learn about Sprint's earnings on Friday given the Instinct smartphone was well received and Sprint has continued its strong marketing push about its customer service.

Comment and Contribute