It looks as if the honeymoon of Google buying Motorola back in May has come to an end. With Google wanting to use Motorola Mobility to create better smartphones and tablets they need to change the overall game plan of the company. Currently the company has dozens of designs on the market and Google has no room for low-end devices in its product lineup. So who has to be worried about going? Well it looks as if 4000 jobs are going to be closed out and one-third of its 94 worldwide offices are going to be closed. So yes 20% of Motorola’s workforce is soon going to be unemployed.
So who exactly got laid off? Well the cuts weren’t too any specific area and appear to have been made across the board. While it may only be the beginning of layoffs it doesn’t give us any indications on what exactly the company has planned. Cuts were made from multiple divisions and none of which that seemed to have a specific area that spelled out what product line Google may be planning to get out of. Motorola has its handset making business, tablets, set-top box lines, and its 17,000 patents that they had picked up in this deal. It looks as if the main focus on this was to slowly return Motorola’s handset unit to be profitable.
Layoffs though won’t make it instantly profitable as Google is being more than generous in how it’s handling the layoffs. While many companies give you a pink slip and a box to take out your personal processions home – Google has class. In its updated 8-K form that gave information on what is happening we learned that:
Google expects to incur a severance-related charge of no greater than $275 million, which it believes will be largely recognized in the third quarter, with the remaining severance-related costs recognized by the end of 2012. Google also expects to incur other restructuring charges related to the actions described above, the majority of which will be recognized in the third quarter. Although Google cannot currently predict the amount of these other charges at this time, these additional charges could be significant.
What does this $275 million mean for employees? Well according to Google it is going to mean Generous severance packages, as well as outplacement services to help the employees find new jobs. If you do have to lose your job in this economy at least losing it with a Google goodbye package might help sweeten the loss a little. The troubling aspect though is that the 4,000 employees laid off are most likely not the only ones who will soon be without a job. With the extra payout they are giving they know that this isn’t going to be an instant fix to get the company back in good standings but do believe it is part of the right path to returning Motorola to being a profitable company.
It is too early to say what Motorola Mobility’s focus will be quite yet past having an internal brand to make cell phones and tablets quite yet but only time will tell.
Related Link: NYTimes