Google cuts 4,000 jobs at Motorola Mobility

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Aug 14, 2012 at 4:50pm

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Owning a hardware maker is forcing software giant Google to do something it had managed to avoid: massive layoffs.

Google announced Monday it will cut 4,000 jobs at its recently purchased Motorola Mobility unit and close or consolidate a third of its 90 facilities as it integrates the manufacturer into its evolving mobile strategy.

Google said two-thirds of the job cuts will be outside the U.S. It said it'll "simplify (Motorola's) mobile product portfolio - shifting the emphasis from feature phones to more innovative and profitable devices."

"These changes are designed to return Motorola's mobile devices unit to profitability, after it lost money in 14 of the last 16 quarters," Google said in a regulatory filing with the Securities and Exchange Commission.

The decision to reduce 20% of Motorola Mobility's 20,000 employees isn't a total surprise: Motorola lost $249 million last year - vs. a loss of $86 million in 2010 - and has failed to keep up with rivals, such as Samsung Electronics.

Motorola, once the second-largest phone maker with several hit devices, has steadily lost market share.

Samsung, whose phones mostly run on Google's Android, is the largest phone maker, with 33% of the market worldwide, says research firm IDC.

Apple and Nokia have 17% and 6.6%, respectively.

Google announced plans to buy Motorola Mobility in August 2011 for $12.5 billion.

At the time, the move was a head-scratcher for analysts who follow Google, which has built its empire on its search engine and other software.

But the deal gave Google a well-known phone maker and a portfolio of patents in mobile technology.

USA TODAY

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