As first reported by the New York Times, Google-owned Motorola is cutting 4,000 jobs, or roughly 20-percent of its workforce, in the hopes of becoming profitable again. The news was confirmed in a U.S. Securities and Exchange Commission filing released this morning just before the markets opened. Google/Motorola further noted in the filing that it would consolidate 30 of its 90 facilities and “shift its emphasis from feature phones to more innovative and profitable devices.” Two-thirds of the job cuts will occur outside of its U.S. facilities.
Google’s $12.5 billion acquisition of Motorola was officially completed in May, after news of the acquisition was announced in August 2011. The deal went through many regulators before becoming official. Google is said to have acquired the company for its large portfolio of over 17,000 patents, and the company has reassured time-and-time again that it will keep Motorola running as a separate entity but will use Motorola’s large patent portfolio to protect its Android operating system.
Fueling the job cuts, Motorola has not been profitable the last 14 out of 16 quarters—even with popular smartphones like the Motorola DROID RAZR and RAZR HD on the market. Since the acquisition was completed in May, Motorola’s CEO Sanjay Jha stepped down from his post with as many as five other Motorola executives. Motorola also announced last week that it is moving its headquarters from suburban Illinois to downtown Chicago, signaling a major overhaul in the company. As major company changes occur, Google warned “investors should expect to see significant revenue variability for Motorola for several quarters” and the company will lose roughly $275 million from the cuts and closures.
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