Google-owned Motorola Mobility yesterday informed its employees that it would be cutting 20 percent of its global workforce and shut almost a third of its offices across the world. According to reports, Google also said that the company would be shifting focus to manufacturing a handful of high-quality devices as opposed to a number of handsets every year. Importantly, the search giant will shrink Motorola’s operations in Asia and India, centering its research and development divisions in Chicago, Sunnyvale and Beijing.
Google acquired Motorola Mobility for $12.5 billion in May this year. Motorola Mobility, which separated from the now-independent Motorola Solutions last year, has experienced heavy losses. Google said in a filing to the U.S. Securities and Exchange Commission, "These changes are designed to return Motorola's mobile devices unit to profitability, after it lost money in fourteen of the last sixteen quarters."
To lay off 4K Motorola staff
o lay off 4K Motorola staff
The Motorola management will also be cut down with about 40 percent of its Vice Presidents set to be handed Pink Slips. According to reports, the job cuts may set Google back by $275 million in severance-related charges. As per a report by The New York Times, the move is one of the first steps by Google in its bid to reinvent loss-making Motorola, and augment the Android platform and expand beyond just search and software into hardware manufacturing. Reportedly, the mobile manufacturer has lost $233 million in its first six weeks under Google.
The New York Times reports that one-third of the 4,000 jobs lost would be in the U.S. The report cites Dennis Woodside, Motorola's new chief executive, as saying that the company plans to leave unprofitable markets, stop making low-end devices and focus on a few cellphones instead of dozens. “Woodside also plans to cut the number of devices Motorola makes from the 27 it introduced last year to just a few. He wants to make the company's products cool again by loading them with things like sensors that recognise who is in a room based on their voices, cameras that take crisper photos and batteries that last for days,” the report states.
According to the report, Woodside said Google benefited from many manufacturers’ using Android and repeated Google’s promise that Motorola would have no advantages. He said Motorola would also compete equally with others to build Google-branded Nexus devices, which Google makes with a hardware partner when it introduces new versions of Android.