Google plans to cut 4000 jobs at Motorola

Google will cut about 4,000 jobs at its Motorola Mobility Holdings Inc. unit, or 20 per cent of the staff at the company it bought for about $12.5 billion. Two-thirds of the reductions will be outside the US, the Mountain View, California-based company said in a regulatory filing today. Google will also shut down about one-third of Motorola Mobility’s 90 facilities and simplify its wireless product portfolio, it said. Google said the measure will incur severance-related costs of no more than $275 million.  “These changes are designed to return Motorola’s mobile devices unit to profitability,” Google said in the filing. “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.” Larry Page, who became the chief executive officer of Google last year, is streamlining the company as it pushes into the hardware market. Google, owner of the world’s most-popular search engine, completed the takeover of Motorola Mobility in May in its biggest takeover, boosting its patent portfolio and stepping up competition with competitor Apple Inc.  “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 an e-mailed statement before Google’s filing was released. Google has also shaken up Motorola management, eliminating 40 per cent of its vice presidents, said a person familiar with the matter, asking not to be identified because the detail isn’t public. Shares of Google were little changed at $642 on Aug.10. The stock has dropped 0.6 per cent this year. Motorola said it expects this strategy to create new opportunities and help return its mobile devices unit to profitability. It also understands how hard these changes will be for employees, the company said. The acquisition, announced last year, gives Google a trove of more than 17,000 patents amid rising popularity for its mobile Android software. Motorola and other handset makers that use Android, including Samsung Electronics Co. and HTC Corporation (2498), have faced legal battles around the world over technology used in the devices. Android has emerged as the No. 1 operating system on smartphones with 68 per cent of the global market in the second quarter, according to market researcher IDC. In the first quarterly report with Motorola included in results, Google said Motorola Mobility contributed revenue of $1.25 billion for the second quarter. Overall, sales were $12.2 billion, compared with $9.03 billion a year earlier, the company said on its website. From:Gulftoday