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August 14, 2012

Google to lay-off 20% of Motorola workforce

Google's restructuring plan will close or consolidate about one-third of Motorola's 90 facilities.

By CBR Staff Writer

Google is planning to lay-off 20% of Motorola Mobility’s workforce by slashing 4,000 jobs as part of company’s large scale restructuring plan.

Under the restructuring plan the company will close or consolidate about one-third of its 90 facilities.

Nearly one-third of the jobs would be slashed in the US, while clear specification about the effected facilities was not revealed by the firm.

As part of the plan the company plans to simplify its mobile product portfolio — shifting the emphasis from feature phones to more innovative and profitable devices.

Last year, Google acquired Motorola in a transaction worth $12.5bn, aimed at deploying the cell phone maker’s patents to keep away legal attacks on its Android mobile platform and develop its software business.

Google reported in its filing with the US Securities and Exchange Commission 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.

"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," Google said.

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The internet search firm is also expecting to raise severance-related charge of nearly $275m in the third quarter of 2012 and would also include other restructuring charges during the quarter.

According to the New York Times, the search engine firm was earlier planning to reduce its operations in Asia and India.

In addition to the scheduled job cuts, Google has also scaled down Motorola Mobility’s management, by letting go 40% of its vice presidents, but has also appointed new senior executives.

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