Google begins Motorola turnaround by slashing 4,000 jobs
#SuryaRay #Surya Google is starting the process of remaking Motorola, the device manufacturer it bought for $12.5 billion, by slimming it down first with a 20 percent cut of its global workforce, or 4,000 jobs. The reduction, part of a larger restructuring that will include the closure of 1/3 of Motorola’s more than 90 global offices, are part of an effort to make Motorola more competitive as it loses ground to smartphone leaders Apple and Samsung, according to a story first reported in the New York Times.
The cost of the cuts, according to an SEC filing, will tally no more than $275 million this year. About a third of the job losses will take place in the U.S. It’s not entirely unexpected considering the mounting losses at Motorola, whose phone business has been unprofitable 14 of the last 16 quarters. And considering at least a portion of the $12.5 billion acquisition was about Motorola’s 17,000 patents, Google was expected at some point to cut into Motorola’s workforce.
According to the Times, Motorola is introducing a more DARPA-like development process with a new advanced technology group, whose employees will sign on for just two years at a time. Motorola will also streamline the number of components and suppliers it uses. And it’s also reducing the number of lower priced cell phones it manufacturers with an eye toward making more high-end profitable devices. Operations will be reduced in Asia and India with research and development centered in Chicago, Sunnyvale and Beijing.
Google will still face challenges in turning around Motorola and also showing its Android manufacturing partners that it’s not giving Motorola preferential treatment. It will need to churn out some winning devices to justify its Motorola purchase, but if it’s too successful, it may raise the ire of Android manufacturers.
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