Staffing Up Will Be Key Task
For New Motorola Chief
Mobile-Devices Unit
Sees Exodus of Talent;
Rivals Get Expertise
By SARA SILVER
September 3, 2008
As Motorola Inc.'s new handset chief, Sanjay Jha, assesses how best to fix the ailing division, he faces an extra challenge: The company's competitors have hired in droves the managers, engineers, designers and sales staff who are leaving Motorola or who have been laid off.
Mr. Jha has said he expects to recruit from outside the company to fill out the executive ranks of his division, called Mobile Devices, by the end of October. All but a handful of the unit's top management posts have turned over -- more than 80% -- since Motorola's flagship Razr phone began to fade in popularity at the beginning of last year. The company is struggling to produce a slate of products that can stem a decline in its market share. In addition, Motorola has announced 10,000 layoffs since the beginning of 2007, including thousands from the mobile-devices unit. From January 2007 through June 2008, 8,300 people were laid off.
Mr. Jha is charged with turning around a division that lost $1.9 billion in the 18 months to the end of June. The former Qualcomm Inc. executive, who took the reins at the mobile-devices unit last month and also holds the title of co-chief executive of Motorola, is being paid handsomely for the task. He stands to make nearly $100 million if his turnaround plan succeeds, and even more if the division is split off as an independent company, a move planned for late 2009. But Mr. Jha is taking on rivals bolstered by the decades of expertise of former Motorolans. Especially valuable are entire teams of engineers who have worked together for years.
The fastest-growing phone makers in the U.S., including Apple Inc. and BlackBerry maker Research in Motion Ltd., have hired key employees from Motorola. Apple has lured away a global head of sales for the game-changing iPhone, a seasoned supply-chain chief and sales reps to help it break into Motorola's turf in Latin America. RIM, which now makes one in 10 cellphones sold in the U.S., says it has hired more than 500 former Motorolans since early last year.
When Apple scheduled a recruiting event for March at a hotel near the mobile-devices unit's headquarters in Libertyville, Ill., Motorola threatened legal action, people familiar with the matter say. Apple canceled that session, but in April offered soda pop and finger food to hundreds of current and former Motorolans who stopped by the "iPhone Engineering and Operations" event at that hotel.
"We're always looking for talent to join our team," said an Apple executive. An Apple spokesman declined to comment.
Motorola says Mr. Jha is the kind of strategic hire who will help lead the recovery of the mobile-devices unit, and that it has retained other seasoned managers. "Motorola has a very deep and wide pool of thousands of talented and experienced employees as well as a strong succession pipeline of executives," said Greg Lee, senior vice president of human resources, in an email.
Motorola's share of global cellphone sales had dropped to less than 10% at the end of June from more than 20% at the start of 2007. The mobile-devices unit lost many of its senior managers after Mr. Jha's predecessor as chief of the unit, Ron Garriques, left in February 2007 for Dell Inc., fueling speculation that the computer maker would develop its own cellphone. Dell declined to comment. Last month, Motorola announced the departure of the highest-level remaining executive at Mobile Devices, Rob Shaddock. When Mr. Jha took over early last month, he became the fifth person to head the unit in 18 months.
An executive at cellphone market leader Nokia Corp. said he has seen no decline in the flurry of résumés he receives from Motorola employees. A Nokia spokeswoman declined to comment on hiring matters.
Some rival handset makers have been seeking out Motorolans to help them crack into Motorola's home turf. Samsung Electronics Co., which has surpassed Motorola to become the No. 2 handset maker in unit sales after Nokia, in May hired a new senior vice president of strategy and product management from Motorola. Sony Ericsson, a joint venture of Sony Corp. and Telefon AB L.M. Ericsson, says it has been hiring as it looks to build on the popularity of its products, including Walkman music phones.
RIM has opened facilities to house former Motorolans in suburban Chicago, Dallas and southern Florida, where it picked up more than 100 employees cut from a Motorola plant. RIM Co-Chief Executive Jim Balsillie says the company could easily hire hundreds more.
The exodus has created other headaches for Mr. Jha. He needs to smooth relations with Motorola partners irked at reaching agreements with employees who don't stay long enough to see the deals through. Most crucially, Mr. Jha needs to win back the trust of the all-important wireless carriers, which have been reluctant to pony up marketing dollars to promote Motorola phones. Chronic delays in rolling out follow-up products to the Razr have opened the way for their customers to bolt to other carriers.
Former Motorola executives say the company will be hard-pressed to replace some of its staff, including researchers being laid off from Motorola Labs, or the expertise lost when a group of software-testing experts laid off from Motorola in Urbana-Champaign, Ill., successfully marketed themselves as a team to Yahoo Inc.
Write to Sara Silver at sara.silver@wsj.com1 |
