Feature Article

August 13, 2012

Google Plans Extensive Layoffs with Motorola Mobility

You don't often hear about Google and job cuts, but the company thinks it may be a surgical necessity if it's to save the flagging Motorola Mobility division it purchased earlier this year.

Google told employees of its Motorola Mobility division yesterday that it will be necessary to cut 20 percent of the workforce – about 4,000 individuals – and close more than 30 of its 94 global office locations.

According to The New York Times today, Google's workforce trims are part of a plan to “reinvent Motorola,” which is lagging behind its biggest competitors, Apple and Samsung. With the acquisition of Motorola, the social search giant also hopes to boost its Android mobile business and expand beyond search and software the device manufacturing business.

At the time of the purchase, Google's purpose was reportedly twofold: acquire Motorola Mobility's valuable patents – nearly 17,000 – to help defend its Android operating system against patent challengers, and use Motorola to make its own, better smartphones and tablets.

At the time of the acquisition, Google's Eric Schmidt told investors that the purchase was engineered “...for the sum of patents, products, the people and the innovation.” But the trims were necessary, according to Google, and may lead to some future instability.

“[Motorola Mobility] lost money in fourteen of the last sixteen quarters,” said the company in an 8-K filing with the U.S. Securities and Exchange Commission. Google is telling investors in advance that they may see “significant revenue variability” in the near future.

Motorola Mobility's earnings in the first quarter of this year revealed a loss of $86 million, more than its $81 million loss in the same quarter a year ago. If the company hopes to turn its purchase into a profitable endeavor, the shake-ups such as these layoffs are likely to continue into the future. \

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Edited by Braden Becker

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