Google has confirmed the firing of 20 percent of Motorola Mobility employees. A company it bought in May.
The company will also close a third of its offices worldwide. According to Google’s SEC filing on the 3rd this month and signed on the 13th 2012 Google will go ahead with and reduce the motorola unit’s 20,000 employees by 4,000 with two thirds of the cut in the US.
Google will also simplify Motorola’s mobile product portfolio to profitability. Motorola Mobility will drop the manufacture of feature phones to profitable devices. Motorola lost money in fourteen of the last sixteen quarters.
According to the Google filing the cut is also expected to reduce the firm expenses which have an impact on its revenue. Motorola annual financial report is here.
Google will however feel the layoffs. The firm will incur a severance-related charge of over $275 million, and restructuring charges due to the staff’s severance packages and job outplacement services for the 4000 employees its laying off at Motorola Mobility.
Motorola Mobility with its more than 17,000 patents and the 2004 RAZR in 2004 and the Droid and RAZR MAXX successes at acquisition was not a loss to Google. The executive team promised to continue being innovative everyday in TV,talk, email, text, and web and were still expectant of a Motorola Powered future but such a move might be a wake up call.
At purchase Google was to run the unit as separate business but its balance sheet has not been convincing. The unit had earlier adopted the Android ecosystem but several structural changes at the firm might have hindered the Android take off at Motorola.
Sanjay Jha who was leading Motorola’s Mobile Devices business with leading the firm towards Android stepped down as CEO. Then incoming CEO Dennis Woodside, former President of Google’s Americas came in with other new executives; the changes were bound to affect its then plans, including the Android move which was more like Jha’s mission.
Its recent announcement to relocate its headquarters in summer 2013 from Libertyville, Illinois to to downtown Chicago’s Merchandise Mart was an indication of things going sour on the firm’s balance sheet.