Industry News Desk
Google to Cut 4,000 Jobs at Motorola Unit
Google figures to concentrate R&D in California, Chicago and China, reducing operations in Asia and India
By: Maureen O'Gara
Aug. 14, 2012 09:00 PM
After buying Motorola Mobility and its 17,000 patents for $12.5 billion in May, Google is going to try to make the place profitable, something that has eluded it for 14 of the last 16 quarters
It's going to start by cutting 4,000 jobs, 20% of the company's 20,000 people. Two-thirds of the job losses will be outside the US.
It also means to close a third of Motorola's 92 facilities and simplify its extensive product portfolio to concentrate on high-end tablets and smartphones, losing a lot of its feature phones.
Google told the SEC Monday morning that it could foresee about $275 million in severance-related costs but that there will be other "significant" charges it couldn't predict. Most of the $275 million will be written off this quarter.
It still expects Motorola's revenues to swing for several quarters.
"While lower expenses are likely to lag the immediate negative impact to revenue, Google sees these actions as a key step for Motorola to achieve sustainable profitability," it said.
Google figures to concentrate R&D in California, Chicago and China, reducing operations in Asia and India.
The New York Times, which broke the story Sunday ahead of the SEC filing, said Google had eliminated 40% of Motorola's vice-presidents. The unit is now in the hands of unit head Dennis Woodside, who replaced Sanjay Jha, and former Defense Advanced Research Projects Agency (DARPA) chief Regina Dugan, who joined Google in March to head an advanced technology group at Motorola.
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