Last night, handset maker Motorola Inc. (NYSE: MOT) announced that it would be slashing another 2,600 jobs as the company continues to battle lower sales. The current job cuts represent approximately 4% of its total job force as of the end of 2007 of 66,000 employees.

It wasn't that long ago that Motorola was a major force in the world of mobile phones, but over the past two years the company has definitely fallen from grace among consumers. Two years ago the company was the world's second largest handset maker, but that status is no more, and the company is currently sitting in the fourth spot overall.

Analysts have blamed the company's drop due to lack of innovation, and some have gone so far as to predict that the company's handset business is doomed if Motorola can not pick up the pace and start to pump out new and fresh ideas for consumers to gobble up.

At its peak, the company was able to rely on sales of its highly popular Razr phone line (which I admit, I still have myself), but the popularity of the Razr phones has fallen, and competitors such as Nokia (NYSE: NOK) and Samsung have been able to leave Motorola behind with their newer models. While last year's launch of the iPhone, by Apple Inc. (NASDAQ: AAPL) was by no means enough to push Apple ahead of Motorola, the iPhone definitely stole customers away from Motorola and has added pressure on the company to step up the development process.

The company recently announced that it was going to separate out this ailing portion of its business, and analysts hope that by giving the handset unit its autonomy that it will be able to attract higher profile executives who can help turn things around. Time will tell how this will play out.


Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the online investment advisory service Investor's Observer.