Motorola slims operation ahead of brand relaunch

Motorola is understood to have put its entire UK and European staff on notice as it looks to scale back its operation ahead of a relaunch in the second quarter of next year.

Motorola is understood to have put a significant number of UK and European staff on notice as it looks to scale back its operation ahead of a relaunch in the second quarter of next year.

It is believed that the handset maker will continue to operate with a skeleton staff until the second or third quarter of 2009 when it will return as a relaunched and restructured company.

It is estimated the review will affect about 30 staff in the UK, almost half of whom work in sales and marketing. It is not clear how many staff it will affect around Europe, where it has offices in France, Germany, the Netherlands, Poland and Hungary.

Industry sources say the company is scaling back its sales activity to operators until the relaunch. It is understood to be talking to two companies, thought to be Carphone Warehouse and O2, about exclusive deals. Motorola says these claims are inaccurate.

The move follows Motorola’s decision to mothball the spin-off of its handset division following poor third quarter results. The company posted revenue losses of 15% to $7.48bn (£4.56bn) for the quarter ending September 30.

It has also warned that its fourth quarter earnings will fail to meet expectations, though its cost-cutting plans, which include axing up to 3,000 jobs globally, will generate $800m (£488m) of annual savings.

The telecoms industry has been badly hit by the global economic downturn with companies such as Sony Ericsson and Nokia also undertaking major cost-cutting programmes.

Motorola this week officially launched its most expensive handset, the Motorola Aura, which will carry a $2,000 (£1,174) price tag. It will be the first mobile phone to have a round screen, made from 62-carat sapphire crystal (MW October 22). It is also launching a phone targeting women, called Moto Jewel. It is not expected to launch any other handsets until it relaunches the business next year.

Motorola denies that it is scrapping new product launches and says it will launch several new handsets over the next few months.

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