In the run-up to Christmas many of us will be looking to lose a few pounds, amongst this crowd is Motorola Mobility who, in a regulatory filing, detailed plans to cut 800 positions within the company.
These cuts will come at an initial pre-tax loss of $27 million in severance pay and a further $4 million in costs involved in closing down sites. Although no one cherishes the announcement of job losses, it was reasonable to expect such a move given the imminent $12.5 billion acquisition by Google, along with Motorola's current net losses; two factors that when combined risk creating a rather large money drain as posts become redundant and losses increase. With an average severance pay of $33,750, hopefully Motorola employees will leave the company on relatively happy terms.
Motorola has already been working hard on reducing its net losses, however, having moved from a loss of $56 million to $27 million in the last quarter, presumably with the hope that these new cuts will bring the company back to break-even. Despite the upcoming Google buy-out, Motorola spokeswoman Jennifer Weyrauch-Erickson stated that these cuts were unrelated to the proposed acquisition and that "Motorola Mobility continues to focus on improving its financial performance by taking actions to manage the company's costs".
It's easy to forget that the Google acquisition has not yet been finalised. The Motorola Mobility shareholders will be expected to vote on this matter November 17th.
