The fallout from Google’s headline-grabbing acquisition of Motorola Mobility in May had yet to fully manifest itself until now, but reports of significant cutbacks show that MM - the market-leader of yesteryear - will take on a more streamlined form heading into its uncertain future.
Sources familiar with the company’s plans have told AllThingsD that around 4,000 people, amounting to 20 per cent of its overall staff, will be shown the door. Two-thirds of the reductions are expected to take place outside the US, sending waves of concern across Europe and the UK.
In addition, about a third of Motorola’s 94 worldwide offices will be closed with a focus on keeping hubs in Beijing, as well as in its native Chicago and California.
“While Motorola expects this strategy to create new opportunities and help return its mobile devices unit to profitability, it understands how hard these changes will be for the employees concerned,” a company representative said. “Motorola is committed to helping them through this difficult transition and will be providing generous severance packages, as well as outplacement services to help people find new jobs.”
Many employees would have been hoping for improved fortunes and greater job security after the $12.5 billion (£7.97 billion) Google takeover this year, with CEO Larry Page at the time calling Motorola “a great American tech company” that had become “incredibly valuable” to Google, and one that would continue manufacturing devices “that will improve lives for years to come”.
But as Charlie Kindel, a former Microsoft manager and industry writer told The New York Times, the outlook for Google’s subsidiary is decidedly bleaker given the unrelenting dominance of market rivals. “Ninety per cent of the profits in the smartphone space are going to Apple and Samsung, and everyone else from Motorola to RIM to LG to Nokia are picking up the scraps of that 10 percent,” Kindel said. “There’s no real sign that’s changing anytime soon.”