Google is looking to restructure its mobile business in order to focus on high-end devices. This new initiative involves laying off 4,000 Motorola employees, about 20 percent of Motorola’s workforce. Google also intends to close 30 Motorola offices worldwide.
What You Need To Know:
- The Motorola acquisition last May has increased Google’s workforce by 20,293, which brings to a total workforce of 54,604. Analysts believe that one of the reasons for the acquisition is Motorola’s 17,000 patents, which could help Google defend against patent lawsuits.
- The planned job cut will cost Google up to $275 million in severance costs.
- Google also hints on dismissing about 40 percent of its vice presidents. In addition, Google is consolidating its global operations.
- Part of the restructure is setting up a new division dubbed as “Advanced Technology and Projects”. The group will be tasked to develop new technologies for future Motorola smartphones.
Google’s venture into hardware could prove a costly gamble. It faces the same problems that other handset companies do: that Apple and Samsung together have locked up around half of the entire smartphone business, and about 90% of its profits, leaving others fighting for the remaining 10%. In the past quarter RIM, Nokia, LG and Sony have all lost money in the handset business, with only HTC and some Chinese companies competing at the low end making profits.
~ Juliette Garside, The Guardian
Sources:
Motorola Set for Big Cuts as Google Reinvents It
The New York Times
Motorola to battle iPhone with military-style skunkworks lab
CNN
Job cuts renew fears that Motorola’s patents matter most to Google
ComputerWorld
Motorola to cut 4,000 jobs in Google restructure
The Guardian