Motorola Mobility is set to shed 800 staff at a cost of $31 million as it streamlines its operations ahead of acquisition by Google.
According to a regulatory filing, pretax costs will include $27 million in severance pay and around $4 million to close its facilities ahead of the takeover, which was approved by the US Securities and Exchange Commission on 24th October, reports business news site Bloomberg Businessweek.
Motorola Mobility agreed to be bought by the search giant in August, in a deal worth $12.5 billion. Google needs the smaller company’s mobile patents to enable it to move into the hardware business.
Google will use Motorola Mobility’s patents – numbering more than 17,000 – to help protect the makers of Android devices from patent litigation by Apple and Microsoft, makers of the iOS and Windows Phone 7 mobile platforms, which have waged a proxy war on the search giant via its hardware partners. In a blog post at the time, Google CEO Larry Page said:
“Our acquisition of Motorola will increase competition by strengthening Google’s patent portfolio, which will enable us to better protect Android from anti-competitive threats from Microsoft, Apple and other companies.”
Steve Jobs, the late co-founder of Apple, told his official biographer that he was willing to fight “to the last breath” to destroy Google’s Android operating system, which he regarded as stealing Apple’s ideas.
Motorola Mobility company insists its cost-cutting is unrelated to the acquisition, having recorded a loss of $32 million this year – albeit down from $34 million in the previous 12 months.
“Motorola Mobility continues to focus on improving its financial performance by taking actions to manage the company’s costs,” Jennifer Weyrauch-Erickson, a spokeswoman for Motorola Mobility, said in a statement.
Now that it has cleared the competition hurdle, the acquisition will go to a vote of Motorola Mobility’s shareholders on 17th November.Leave a comment on this article