By reducing their number of employees, the company hopes to save $400 million

Jan 22, 2007 08:34 GMT  ·  By

One thing Motorola will definitely not cut down on too soon is its RAZR design phones. No matter what people think, or how bored some are with the same design, their design team seems to think they're doing such a good job with the popular skinny phones that they don't seem to want to give them up for anything in the world.

While I don't think that any of the people from the second largest mobile phone maker's (after Nokia) design team will be affected by Motorola's decision, the company is in fact planning to drop some of their employees, to be more specific around 3,500 people (which is 5 percent of its workforce).

According to David Devonshire, Motorola's chief financial officer, the company will eliminate middle management jobs.

What's the purpose of all this? Well, without the 3,500 people that will soon be sacked and other measures that will be taken in order to save money, Motorola is trying to reduce the costs by around $400 million.

The only thing that Motorola is not about to change is strategy. According to Ed Zander, Chief Executive, all is just fine and the RAZR is as popular as it has always been, maybe even more so.

"It's funny, I keep reading about Razrs being tired," he said "We sold more Razrs in quarter four than in any quarter we ever had. We now have sold over 75 million Razrs worldwide."

Aside from cutting down on the number of employees, and several letters from the names of their products (RAZR, KRZR), Motorola has also cut prices of its mobile phones during the fourth quarter to gain market share at the expense of profit margins.

Also, Motorola's net profit was its smallest in nine quarters, dating to the third quarter of 2004 before the RAZR was introduced. So, maybe the RAZR is kind of dieing, don't ya think? It's been around for 3 years already and while some people still like it, others are expecting something different from Motorola, that doesn't include any funny letters or excessive slimness.