The economic slowdown in India is hurting deeper. It has taken a heavy toll of Motorola India’s aggressive plans to expand mobile handsets business, where Nokia is the undisputed leader.
More than 200 people Motorola India had hired just a few months ago to drive hard its mobile handsets sales have all been laid off. The company has decided to carry on with its current model of doing business through its distributors.
As for the rationale behind this decision, Motorola India, through an email response sent via its public relations agency, said “while Motorola has a strong global brand as well as a solid balance sheet and cash position, the company is not immune to the currently weak global economy.”
On the lay-offs, the company further said “Motorola continuously reviews its business and the market to ensure that our resources are aligned with market conditions.”
Industry sources said Motorola paid all the laid-off sales personnel two months salary in lieu of notice period.
Motorola would have made an announcement if it were laying-off employees in its home market, the US, as a matter of routine, but preferred to give the pink slips to such a large number of employees without making any noise.
Motorola, which was third in terms of market share, has fallen behind Samsung. Nokia is the leader far ahead of other mobile handsets makers with around 60 per cent market share. All others have their market share in single digits. Sony Ericsson has about 8 per cent market share, Samsung 7 per cent and Motorola 6 per cent.
Motorola India said “we are working diligently to improve the profitability of our business and are committed to delivering a strong portfolio of exciting new products in 2009 and beyond.”