hr: Money

In 2006, Motorola’s Razr phones were the hottest thing around. It was the ‘must have’ phone, and sales had skyrocketed. All that has changed now. The Motorola handset division has posted a loss of $1.2 Billion due to low sales, and Motorola is struggling to cut more costs.

Photo Credit: outofmytree

In a desperate bid to save it’s handset unit, Motorola has closed a plant in Singapore, and has now laid off 10,000 workers. This will help, but not for long. The best that Motorola can do right now, is to deliver a new phone that will help it to peak it’s sales during Christmas.

Today is when Motorola is going to post the results of this quarter, along with Microsoft. Analysts expect a huge slowdown in it’s revenue, as well as it’s earnings per share.

While some people are assured that since Motorola is a big company, it will recover sooner or later. After all, the worst that can happen is that it will lose a few cents per share. But others feel that Motorola’s problems are more deep seated than that. It’s generally not a good sign when a company shores itself up solely by cutting costs without any improvement in it’s core business. But this is exactly what Motorola is doing. Unless it can improve it’s core sales, things are not going to improve at all in the long run.