Google cuts 4,000 jobs at Motorola Mobility
Aug 15, 2012
Mobile phone maker Motorola Mobility is to cut 4,000 staff worldwide as part of efforts to return to profitability.
Google bought Motorola and its thousands of technology patents for $12.5bn last year
This job losses are the equivalent of 20% of its workforce.
The firm, bought by Google last year, said it planned to close or merge about one third of its 90 facilities which include offices and factories.
US-based Motorola also announced a shift in emphasis away from low-cost non-smartphones to "more innovative and profitable devices".
Two-thirds of the jobs will go outside of the US, Google said. It expects the cost of severance packages to be $275m.
"Motorola is committed to helping them through this difficult transition and will be providing generous severance packages, as well as outplacement services to help people find new jobs," a statement said.
The firm would not comment on exactly where the jobs would be cut. It employs 250 staff in the UK at three sites; Basingstoke, Livingstone and Swindon.
Google Inc.
LAST UPDATED AT 14 AUG 2012, 20:00 GMT
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Lingering losses
Motorola, which once dominated the mobile phone market, has fallen behind its competitors, including Apple and Samsung.
It has lost money in 14 of the past 16 quarters, Google said.
Google bought Motorola Mobility last year in a $12.5bn deal, giving it access to more than 17,000 technology patents.
Technology analyst Anshul Gupta told the BBC that the cuts in staff and facilities were a natural part of Google’s attempts to absorb Motorola into its organisation.
Mr Gupta, from research firm Gartner, said he expected Google to bring out some innovative devices focusing on high-end smartphones, rather than low-end feature phones.
He said there was "definitely scope for competition in hardware, but also in services, where Google has an edge and can really differentiate itself".
The recent success of Samsung, which has been receiving plaudits for its Nexus smartphones and tablets which use Google’s Android operating system, was an example to aim for, Mr Gupta added.
According to one industry watcher, Strategy Analytics, Samsung became the world’s biggest seller of mobile phones earlier this year, overtaking Nokia.
Samsung sold more than 93 million handsets in the first three months of 2012, giving it a 25% market share. By contrast, Motorola said it had sold almost 9 million mobile devices over the same period, of which 5.1 million were smartphones.
Its most recent financial results showed that Motorola Mobility recorded a loss of $86m in the first quarter of the year. That was greater than the $81m net loss it made in the same period a year earlier.
Source: BBC News