Google anticipates cutting more jobs than originally planned due to the restructuring of Motorola.
In August, Google said it would lay off around 20 percent of Motorola’s workforce. The company now expects a higher severance cost than it previously estimated.
Initially, Google expected to book its severance costs at around $275 million, but analysts with Yankee Group say the costs will actually be closer to $300 million. Also, Google originally announced that two-thirds of the layoffs would come from outside of the U.S., but after a filing with the Securities of Exchange Commission, jobs will now be cut from “additional geographic regions outside of the U.S.”
Wally Swain, Yankee Group senior VP of research, said that strategy has always been a question with Google and Motorola. He questions whether the Motorola purchase was just an IPR play, if Google plans to produce reference devices, and if Google “even care(s) that Motorola makes money.”
“Announcing an expansion of the layoff costs may just be a refinement of the estimates, but it is more likely an expansion of the program,” Swain said. “… Yes, Google is not prepared to fund Motorolas losses indefinitely. That probably means the concept of a full-blown competitor is off the table so Google is not planning to do battle with Samsung, HTC, LG and other Android manufacturers.”
Wally added that the option of a “reference design-house” is still viewed as likely.
He said, “If all Google wanted was the IPR portfolio, they would close Motorola completely or license the brand to some company from Shenzhen.”