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Google (GOOG) Looks to Slim Down Motorola the Old Fashioned Way: Job Cuts

August 13, 2012 9:09 AM EDT
Google's (Nasdaq: GOOG) new four-step "Process to Profit" for its Motorola Mobility unit looks something like this:
  1. Buy company;
  2. Cut 20% of workforce;
  3. ...
  4. Profit!
In a U.S. SEC filing over the weekend, Google disclosed that about 4,000 of 20,000 total positions at its newly acquired Motorola Mobility unit would no longer be there moving forward.

Of the total cuts, two-thirds will be outside the U.S. and about one-third of Motorola's 90 facilities will be closed. In total, costs on the moves are expected to stay at or below $275 million.

Bloomberg also noted that Motorola has cut about 40 percent of vice president spots.

Google closed the $12.7 billion acquisition of Motorola in May. Motorola also boosted Google's patent portfolio by about 17,000, giving the search giant extra leverage in ongoing legal battles for its Android mobile operating system.

With its latest quarterly report, Google said Motorola added $1.25 billion in revs for the second quarter, which was below $3.3 billion in revs reported in the same period last year.

Whether or not Google will lose market share as competitors like HTC and Samsung aim to vary offerings is unclear. Android still retains top-spot in global smartphone shipments and usage, mainly due to the wide variety of devices its employed on. Last week, Samsung was rumored to be eying Research In Motion (Nasdaq: RIMM) ahead of RIM's BlackBerry 10 launch, though no comments were made by either party. Samsung currently manufactures Google's Nexus smartphone.

Google has said in the past that the acquisition of Motorola will have limited impact on competition and it still plans to distribute Android as an open operating system. Its expected that offerings from Motorola will be slimmed down as well from the 10 smartphone devices released in last year.

Ahead of the opening bell for U.S. markets, Google is trading up over 1 percent.


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