Less than three months after Google Inc. formally completed its long-time-due acquisition, Motorola Mobility has turned over a new leaf and has taken a bold decision to restructure its facilities and strategy.
Motorola Mobility has announced that it will slash 20% of its global workforce by terminating 4000 employees. It also revealed plans to close or consolidate around 30 of its current facilities out of a total of 90. These steps are being taken to improve Motorola’s financial standing and to shift focus completely from feature phones to more profitable smart devices.
This information has been revealed in Google’s latest U.S. Securities and Exchange Commission filing. Explaining about the proposed changes, Google’s statement read:
These changes are designed to return Motorola’s mobile devices unit to profitability, after it lost money in fourteen of the last sixteen quarters. That said, 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 expects to spend around $275 million for employees’ severance. Commenting on the decision to layoff record number of employees, the statement maintained:
Motorola understands how hard these changes will be for the employees concerned and is committed to helping them through this difficult transition. Motorola will be providing generous severance packages, as well as outplacement services to help the employees find new jobs.
On the brighter side, Google has brought in Regina Dugan, the first female director of US Defense Advanced Research Projects Agency (DARPA), to lead a newly created group at Motorola known as Advanced Technology and Projects. The primary aim of this new unit will be to focus all energy on innovative hardware design and to turn the world’s first commercial mobile phone maker into a leading smartphone market competitor.