Friday, March 08, 2013

Google to lay off 10 percent more from its Motorola Mobility division

On Thursday, Google began a new round of layoffs at Motorola Mobility, its Android smartphone division. The parent company plans to lay off 1,200 employees, or about 10 percent of its subsidiary.

Google's acquisition of Motorola Mobility for $12.4 billion was finalized last May, and afterward, the Internet giant laid off 4,000 employees, about 20 percent of its then available work force.

When it bought the Libertyville, Ill.-based company, Google reassured other Android OEMs, saying the purchase was primarily for Motorola's rich cache of patents. Since then, though, Google added that Motorola is seen as a safety valve in case Samsung becomes too dominant among Android OEMs.

Motorola confirmed the jobs cuts in a statement it issued on Thursday evening.
These cuts are a continuation of the reductions we announced last summer. It's obviously very hard for the employees concerned, and we are committed to helping them through this difficult transition.
Meanwhile, Google sent an email to Motorola Mobility employees earlier in the week, informing them of the impending cuts. The email said, in part:
[...] while we're very optimistic about the new products in our pipeline, we still face challenges. [...] Our costs are too high; we're operating in markets where we're not competitive and we're losing money.
Google was not exaggerating about losing money. In Q4 2012, Motorola's mobile business lost $353 million.     In comScore's last market share report, the market research firm reported that Motorola had lost 1.4 percent in the U.S., falling to 8.6 percent.

Meanwhile, Apple and Samsung together controlled 57.4 percent of the U.S. smartphone market.

In terms of products in Motorola's pipeline, Google said earlier that upcoming devices aren't likely to wow consumers, as the company has to burn through 18 months worth of products already planned. It's unclear if that timeframe includes products that Motorola has already burned through since the acquisition was finalized.

The layoffs will affect workers in the U.S., China and India.

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