Google has announced today that it will be reducing the workforce at Motorola Mobility by a further 10 per cent, equivalent to 1,200 jobs. This is the latest staff cut Google has imposed upon its smartphone building business acquisition; last August Motorola employees were cut by 4,000. The latest cuts will affect workers in the USA, China and India.
In a bid to make Motorola Mobility independently profitable Google has decided to extend the cuts announced last August to include a further 1,200 people. In an email to Reuters spokeswoman Niki Fenwick said “These cuts are a continuation of the reductions we announced last summer.” Fenwick added that “It's obviously very hard for the employees concerned, and we are committed to helping them through this difficult transition”.
Details from an internal Motorola email concerning these new job cuts were published by the Wall Street Journal late last night. This communication contained an explanation of some of the reasons behind the cuts. The email said “while we're very optimistic about the new products in our pipeline, we still face challenges”. The main challenges are costs; “our costs are too high, we're operating in markets where we're not competitive and we're losing money.”
The WSJ notes that Motorola has been a continuous drain on cash resources since its acquisition about 15 months ago. Motorola’s tablets and smartphone ranges are currently being streamlined but market share continues to wane. However Google hasn’t just been heavily pruning the company workforce in order to turn it around, it has strategically “transferred numerous executives and product managers to help run Motorola with the hope of producing devices that would rival those of Apple”. The fabled Motorola X Phone may be the first fruit from these efforts, when it eventually emerges.
The WSJ also said that Motorola is “an insurance policy” in case Google loses control of Android to Samsung. In that event Google would integrate Android software and Motorola hardware to its best advantage rather than following the current non-preferential business policy.
