Motorola sacks 20% of employees as Google steps in to make it profitable

Motorola sacks 20% of employees as Google steps in to make it profitable

Motorola will be sacking 20 percent of its global workforce – or 4,000 employees – as Google tries to bring the struggling Android manufacturer to profitability, after purchasing it for US$12.5 billion last year mainly because of its patents.

In a filing, Google said that the sackings were to “return [it]’s mobile devices unit to profitability,” adding 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.”

A report by Bloomberg has indicated that Google is not sparing middle management, with 40 percent of its vice presidents are getting the pink slip, and two-thirds of the job cuts are coming from outside of the United States. Motorola will also shut down one third of its 90 facilities.

The company will also be heading towards a HTC-like model where it will only focus on producing a smaller number of Android devices. HTC changed its tact this year with the company only releasing the One series of phones, with some good reviews.

Google bought Motorola in August of last year largely because of its large portfolio of patents – something now considered a commodity since Apple, and rival Android manufacturers Samsung and HTC, have taken legal action against each other over ‘patent infringement’.

via Bloomberg

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