Google purchased Motorola Mobility in a move that stunned many when the company paid $12.5bn last May for the struggling mobile manufacturer. It seems the troubles at the American company have not been resolved and Google has decided to get rid of 10 percent of the employees at Motorola Mobility. The 1,200 workers and other employees of the company received an email that the Wall Street Journal reports said the company is, “operating in markets where we’re not competitive and we’re losing money.” The pink slips will be sent to employees working in Motorola Mobility units in the US, China and India.
This is not the first time the Google owned company has faced reductions in staff. A previous purge of staff took place in August when 20 percent of the work force was reduced while the company’s setup in China got a 30 percent trim.
Google bought Motorola Mobility to get at the company’s portfolio of 17,000 patents and placed its own executives in charge of running the firm.
The CEO of Motorola, Dennis Woodside, has stated that his firm will be getting out of sectors that are not profitable. Instead the Google owned firm will focus on only a few devices and drop all others. Patrick Pichette, Google’s chief financial officer, has claimed that “Motorola was still draining old an 18 month pipeline of inherited products and that none of the products Motorola had released yet had the “wow” Google expected.” However, one smartphone that the company may be producing soon will be the rumored X-Phone. This is expected to the the new version of Google’s popular Nexus smartphones.
The job cuts may end up costing Google a lot of money and according to a US Securities and Exchange Commission (SEC) filing the company told investors that the move will cost $275 million.
The company stated that, “Motorola will be providing generous severance packages, as well as outplacement services to help the employees find new jobs.
“Google expects to incur a severance-related charge of no greater than $275 million, which it believes will be largely recognized in the third quarter, with the remaining severance-related costs recognized by the end of 2012.”
“Google also expects to incur other restructuring charges related to the actions described above, the majority of which will be recognized in the third quarter. Although Google cannot currently predict the amount of these other charges at this time, these additional charges could be significant.”
Source: The Inquirer, ZDNet
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