Motorola Mobility Set to Slash International Staff, Facilities

By Grahame Lynch

Google said overnight that it would slash 4,000 of 20,000 jobs at Motorola Mobility and close about onethird of the handset firm’s 90 international facilities. In an SEC filing, Google said two-thirds of the staff reduction is set to occur outside of the U.S. In addition, it plans to simplify its mobile product portfolio-shifting the emphasis from feature phones to more innovative and profitable devices. 

Google added: “These changes are designed to return Motorola’s mobile devices unit to profitability, after it lost money in fourteen of the last sixteen quarters. That said, investors should expect to see significant revenue variability for Motorola for several quarters. While lower expenses are likely to lag the immediate negative impact to revenue,

 Google sees these actions as a key step for Motorola to achieve sustainable profitability.” It continued: “Motorola will be providing generous severance packages, as well as outplacement services to help the employees find new jobs.” Google expects to incur a severance-related charge of up to $US275 million. The move follows Google’s completion of its US$12b acquisition of Motorola Mobility earlier this year and the installation of its own appointed CEO, former Google sales executive Dennis Woodside.

Motorola Mobility currently markets 27 separate handset models but will now only make a few highend models. Initial US media reports suggest that the firm’s Indian operation will be primarily affected with operations to be consolidated in China, Illinois and California. The firm has recently hired an eclectic array of metal scientists, acoustics engineers and artificial intelligence experts on short-term contracts, a strategy designed to reinforce a sense of urgency in turning the company around, according to a New York Times report.

Motorola’s global mobile market share is estimated by US analyst firm Trefis to have peaked at 22% in  2006 and is now less than 3%. But the firm is still regarded as important by mobile operators, keen to avoid the potentially negative effects of a Apple-Samsung duopoly. – www.commsday.com