Aiming to return Motorola Mobility to profitability, Google Inc. has revealed plans to cut 4,000 jobs as part of a broad restructuring effort.
Google’s subsidiary, Libertyville, Ill.-based Motorola Mobility, will cut one-fifth of its global workforce, with nearly 2,700 jobs or two-thirds of the reduction occurring outside the United States. Motorola also plans to close or consolidate roughly one-third of its 90 facilities.
In a regulatory filing, Google said the changes are being made to return Motorola’s mobile devices unit to profitability after it bled losses in fourteen of the last sixteen quarters.
Google, the search-engine giant and owner of the Android operating system for mobile devices, cautioned that “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,” Google revealed.
As part of its restructuring effort, Google added, Motorola also will be “shifting emphasis from feature phones to more innovative and profitable devices.”
Google noted Motorola will furnish “generous severance packages” and outplacement services to help the impacted employees find work. Google anticipates incurring up to $275 million in severance-related charges as well as other restructuring charges that it said “could be significant.” Many charges are expected to be incurred in the third quarter.
In May, Google completed its acquisition of Motorola Mobility for $12.5 billion, broadening its stake in the wireless business. IDC reported last week that 68.1 percent of all smartphones shipped in the second quarter ran on Google’s Android operating system. That’s up from 46.9 percent in the year-ago quarter.
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