Motorola Mobility to close Chennai assembly plant

U.S. phonemaker will suspend operations of the facility in February 2013, as part of continued efforts to streamline its global supply chain, but R&D and other corporate functions will remain there.

Google-owned phonemaker Motorola Mobility said it will suspend operations indefinitely at its assembly and packaging facility in Chennai, India, as it continues efforts to streamline the company's global supply chain and lower costs.

India's Business Standard reported Wednesday that the suspension will begin in February next year, and 76 staff at the plant will be laid off.

William Moss, director for communications in Asia-Pacific at Motorola Mobility, said the decision boiled down to the company's worldwide supply chain streamlining effort.

"We are now fulfilling customer orders directly from factories and we have no current or forecast production requirements that would require the continued use of our Chennai facility," said Moss.

The company is also working with the impacted staff to settle all dues, provide relief packages and help them find other opportunities, according to him.

Moss added that Motorola Mobility's research and development (R&D) operations in Bangalore for mobile devices, and other corporate functions in India will continue.

The Chennai plant began operations back in 2008, with an investment of INR 1.72 billion (US$31.7 million), the report said.

Back in August, Motorola Mobility announced it will slash 20 percent of its workforce , as part of its global business restructuring effort. In the same month, the company said it was cutting 30 percent of its workforce in China , mostly from R&D and sales and marketing departments.

Just a day ago, the company and Singapore-based electronics contract manufacturer Flextronics said they signed a definitive agreement where Flextronics will acquire Motorola Mobility's manufacturing operations in Tianjin, China and Jaguariuna, Brazil .

Earlier this week, Motorola also said it was shutting down most of its operations in South Korea and cut more than 500 staff there.