Tue, Aug 14, 2012 - Page 15 News List

Motorola facing big cuts: source

Bloomberg

Google Inc plans to cut about 4,000 jobs at its Motorola Mobility Holdings Inc unit, or about 20 percent of the staff at the company it bought earlier this year, according to a person familiar with the matter.

Two-thirds of the cuts will be outside the US, said the person, who declined to be identified because the matter is not public. Google is also axing about one-third of Motorola Mobility’s facilities, said the person. Motorola, which told employees on Sunday of the cuts, is to make the changes during the next few weeks, the person said.

“Motorola is committed to helping them through this difficult transition and will be providing generous severance packages, as well as outplacement services to help people find new jobs,” Motorola Mobility said in a statement without stating job cut numbers.

Google has also shaken up Motorola management, eliminating 40 percent of its vice presidents, said the person.

Motorola said it expects this strategy to generate opportunities and help return its mobile devices unit to profitability. It also understands how hard these changes will be for employees, the firm said.

Google, owner of the world’s most-popular search engine, paid about US$12.5 billion in May for Motorola Mobility in its biggest takeover, boosting its patent portfolio to more than 17,000 patents and stepping up competition with competitor Apple Inc.

In the first quarterly report with Motorola included in results, Google said Motorola Mobility contributed revenue of US$1.25 billion for the second quarter. Overall, sales were US$12.2 billion, compared with US$9.03 billion a year earlier, the company said on its Web site.

Google plans to use the Motorola division to produce smartphones and tablet computers that can help it set the pace of innovation in the mobile business, Dennis Woodside, who leads the Motorola unit, said in an interview with Bloomberg Businessweek magazine in May.

Motorola released about 20 smartphones last year, which Woodside said is too many. He plans to focus on trying to make a few great devices and then concentrate on marketing resources to sell them.

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