Business, Economics and Jobs

Google cuts 20 percent of Motorola's workforce


A man takes pictures with his mobile phone at the Motorola's stand of the Mobile World Congress in Barcelona on February 29, 2012.



Motorola Mobility's workforce will be cut by 20 percent in the coming days, the Wall Street Journal reported.

Google purchased the ailing mobile company in May for $40 a share in cash, or $12.5 billion, according to The New York Times. The Times noted that Motorola manufactures phones that run on Google’s Android software.

Ben Schachter, an analyst with Macquarie Capital, noted in May that, “This is an emphatic exclamation point that Google is a mobile company. This is clearly a defensive deal, they were backed in a corner and they had to protect the Android platform.” 

In a filing with the Securities and Exchange Commission, Google said that the layoffs will "shift its emphasis from feature phones to more innovative and profitable devices," adding that "these changes are designed to return Motorola's mobile devices unit to profitability, after it lost money in fourteen of the last sixteen quarters."

According to the Wall Street Journal, two-thirds of the workforce reductions will take place outside the US. Motorola also plans to close or consolidate about 30 of its 90 facilities.

A Google spokesperson told Reuters, "Motorola is committed to helping them (the employees) through this difficult transition and will be providing generous severance packages, as well as outplacement services to help people find new jobs."