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Just days ahead of its second-quarter earnings report, Motorola has set a major reorganization in motion, as the company battles a sluggish economy and intense market pressure.
The company’s Home & Networks Mobility business will now focus on three areas: Broadband Home Solutions, Broadband Access Solutions and Cellular Networks.
“Today’s announcement builds on the business’s strong global leadership and its great momentum,” Motorola said in a statement to InternetNews.com. “We are confident that this change will position the Home & Networks Mobility business for even greater success in the future.”
In addition to Motorola’s earnings, which are due Thursday, the news comes amid a wider overhaul of the company’s flagging business that may likely lead to a spin-off of its handheld unit, among other changes.
The Home & Networks Mobility is led by longtime veteran Dan Moloney. An executive vice president, Moloney had served as president of the
company’s former Connected Home Solutions business, which has been combined into the Home & Networks business. He’ll now oversee the Broadband Home Solutions unit, which includes video systems as well cable and IPTV set-top boxes, broadband modems, and residential cellular base stations and gateways.
Moloney’s group also includes Motorola’s Cellular Networks business, which incorporates standards such as CDMA and GSM/UMTS. The Broadband Access Solutions group focuses on high-speed technologies like LTE, WiMAX and cable.
Moto watchers react
While the investment community generally looked favorably on the reorganization, which took place over the weekend, Motorola’s stock dipped on Monday, closing down 4 percent at $7.08 per share.
While nowhere near a resounding endorsement, Motorola executives are
likely happy to get even this sort of a response, according to industry
analysts.
Jeff Kagan, a telecom analyst, predicted “a massive rewrite” of the company’s mission. “This ‘version 2’ of the company will look radically different than
version 1,” he told InternetNews.com. “I think this reorganization was a way to get some signals from the investment community before the [mobile device division] spin-off next year.”
Motorola announced last January that it planned to spin off its handset division sometime next year and has been looking for a new leader to run the business.
CEO Greg Brown assumed
direct control of the group shortly after taking the helm at the company earlier this year.
“Motorola is not the usual company,” Kagan said. “It’s a leader and a historic one. Finding someone to take that job is like trying to find someone who’ll catch a knife as it’s falling.”
The corporate memo released late last week detailing the reorganization didn’t draw much employee response, according to an employee who requested anonymity. The news was e-mailed only to employees in the impacted divisions, the employee said.
“The rumor mill has been exceedingly quiet lately,” said the 10-year
employee, who does not work in the affected division.
“Reorgs are a way of life in any large company, and it’s an accepted — and joked about — part of the culture here,” the employee told InternetNews.com.