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Google Cutting Even More Jobs at Motorola Mobility

By - Source: Wall Street Journal | B 9 comments

Google is seemingly trimming the Motorola Mobility fat so the company can finally generate some profit.

The Wall Street Journal reports that Google-owned Motorola Mobility is cutting even more jobs, laying off about 1,200 employees, or more than 10-percent of the overall headcount, from the hardware unit. The layoffs are seen as a move to return the smartphone maker to profitability as it struggles to regroup in a heated market dominated by Samsung and Apple.

According to the report, Motorola Mobility staff members were told via an internal email that the company still faces challenges even though new products are in the pipeline. "Our costs are too high, we're operating in markets where we're not competitive and we're losing money," the company email stated.

"These cuts are a continuation of the reductions we announced last summer," a Motorola representative told the paper. "It's obviously very hard for the employees concerned, and we are committed to helping them through this difficult transition."

Back in August 2012, Google confirmed that Motorola Mobility would cut 20-percent of its workforce, or about 4,000 jobs. Motorola Mobility posted an operating loss of more than $500 million USD in 3Q12, and then followed up with another $350 million+ loss in the fourth quarter. Job cuts were seemingly inevitable.

Then in December, Google sold the Motorola Home set-top business to Arris Group for $2.35 billion, and cut an additional 500 jobs. Google said at the time that Motorola Mobility still had 11,113 workers employed. There were also rumors that Motorola Mobility would begin focusing on high-end smartphones, one of which would be a Nexus-branded flagship device.

Patrick Pichette, Google's chief financial officer, followed up in January by stating during an earnings call that Motorola Mobility was still a work in progress. "I just want to remind everybody that we inherited 12-18 months of product pipeline that we have to work through," he said.

Google acquired Motorola Mobility in a $12.5 billion deal back in April 2012. Since then, many Android partners have feared that the new smartphone subsidiary would get special treatment despite the search giant stating otherwise. Google execs have actually called Motorola Mobility an "insurance policy" in case Google loses control of Android to Samsung.

One of the products supposedly in the pipeline is a Nexus-branded smartphone currently dubbed as the "X Phone." Google is looking to spark the same success Motorola experienced with the launch of the original DROID line, offering something new and exclusive to compete directly with Apple's iPhone and Samsung's line of high-end Android smartphones.

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  • 8 Hide
    house70 , March 9, 2013 12:09 AM
    Moto needs to make a great phone, sell it unlocked everywhere and will have great profit. Something great, like the good old Razr flip-phone was at the time. They have pretty much sold themselves to Verizon so far, hardly a winning move. Heck, if they upgrade the screen in the Razr Maxx HD and make it available unlocked worldwide they would have a winner.
    The old Razr flip-phone was available on any network, and also unlocked for people that wanted it unlocked. Result? Best-seller.
  • 1 Hide
    greghome , March 9, 2013 12:34 AM
    and I thought after such a long time since the buy out, we would be seeing all Nexus devices made by Moto by now...
  • 3 Hide
    CKKwan , March 9, 2013 12:35 AM
    Motorola is too process oriented, too proud about their 6-sigma, TPM etc. Can't compete in this agile world.
  • 1 Hide
    Darkk , March 9, 2013 3:15 AM
    Motorola is going the way of RIM if they don't produce a winning product soon.
  • -2 Hide
    zanny , March 9, 2013 3:53 AM
    I don't know why everyone is treating Motorola as this distinct entity. Google owns it, and they bought Motorola for the patent portfolio, not the phone hardware. They will keep systemically dismantling it until nothing is left - if Google ever meant to actually use the hardware business, last years Nexus line would have been made by Motorola.
  • 0 Hide
    assasin32 , March 9, 2013 8:22 AM
    I have a Razr M I am actually quite surprise it's not more popular, it's a great phone in my opinion. If I remember off hand same cpu/gpu as the SIII, great battery life, runs jelly bean, small phone with a 4.3in screen without the form factor, 2,000 mah battery, and cheap price.

    I know when I was looking for phones it seems like the only choices now days were large behemoths they call a phone or something smaller with significantly lower end parts than this. Where as this provided more high end parts in a small package with price and battery life along with it.

    This is more my opinion on things, but with how cell phone market is right now it seems like I am not the norm. Oh well hopefully when I get my next phone I find a suitable replacement that is like this.
  • 0 Hide
    harrypotter , March 9, 2013 1:08 PM
    It's because it is lot harder to steel someone else's intellectual property and call it yours in pc/wkn 8 ecosystem than in mobile, so Samsung has no interest ton stay there
  • 0 Hide
    murzar , March 9, 2013 5:30 PM
    My first couple of phones were Motorola, I loved their design and they were the original 'sexy' unlike a certain pretentious fruit. But terrible ergonomics and annoying keypad (I hated it). I also loved it for their 'M' on their phones, because.. well.. my name started with an 'M'. :p 

  • 1 Hide
    old_newbie , March 10, 2013 1:53 AM
    Not sure why people are bashing Motorola of the recent past. IMHO their 'Droid' line significantly brought the android OS to the frontlines against the Iphone. I have an Atrix 2 with the Lapdock accessory and It 'wows' people everytime they see it (phone docks into 'dumb' laptop, becomes its brains). Unfortunately that and their other accessories were ahead of their time and never caught on (read: promoted correctly).