Google Said to Cut About 4,000 Workers in Motorola Unit

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 reductions will be outside the U.S., said the person, who declined to be identified because the matter isn’t public. Google is also shutting down about one-third of Motorola Mobility’s facilities, said the person. Motorola, which told employees yesterday of the cuts, will 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 an e-mailed statement without specifying the number of job cuts.

Larry Page, who became the chief executive officer of Google last year, is streamlining the Mountain View, California-based company as it pushes into the hardware market. Google, owner of the world’s most-popular search engine, paid about $12.5 billion in May for Motorola Mobility in its biggest takeover, boosting its patent portfolio and stepping up competition with competitor Apple Inc.

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

New Opportunities

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 New York Times reported the Google plan earlier today.

Shares of Google were little changed at $642 on Aug. 10. The stock has dropped 0.6 percent this year.

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 Corp., 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 percent 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.

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 in May.

“This is a huge opportunity to really show what Android can do in a well-designed, well-packaged, and well-marketed product,” Woodside said.

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, he said in May.

Source: Bloomberg