Google to cut 20% Motorola staff for profit sake
In a filing submitted to the Securities and Exchange Commission detailing the plans, Google didn’t single out any specific parts of the company for the layoffs, but it was noted that Motorola’s product line would change as a result of the changes, which will include some office and plant closures as well.
“Two-thirds of the reduction is set to occur outside of the U.S.,” Google wrote in the filing. “In addition, Motorola plans to close or consolidate about one-third of its 90 facilities, as well as simplify its mobile product portfolio — shifting the emphasis from feature phones to more innovative and profitable devices.”
Google closed its $12.5 billion takeover of Motorola Mobility in May. Shortly thereafter, Google appointed Dennis Woodside as the subsidiary’s new CEO. Woodside has no background in consumer electronics, the mobile industry or engineering. Rather, Woodside is a mergers and acquisitions lawyer who has been with Google since 2003, and oversaw the company’s efforts to purchase Motorola Mobility.
The job cuts and facility closures are all being made with an eye toward making Motorola a self-sufficient, profitable entity, Google said in the filing, noting that Motorola Mobility “lost money in fourteen of the last sixteen quarters.”
It’s unclear if the decision to make the job cuts came from Woodside and Motorola, or Google and its Chief Executive, Larry Page. Google has said in the past that it would let Motorola run as a company independent of its richer, more profitable parent.
Officials at Google and Motorola were unavailable on Monday to comment beyond the SEC filing, which was first reported on by The Next Web.
The moves, of course, won’t come without a cost.
Google expects to incur a severance-related charge of no greater than $275 million, which it believes will be largely recognized in the third quarter, with the remaining severance-related costs recognized by the end of 2012.
Although Google cannot currently predict the amount of these other charges at this time, these additional charges could be significant.
Google also expects to incur other restructuring charges related to the actions described above, the majority of which will be recognized in the third quarter.