Tags: Google | Cuts | Motorola | smartphone

Google Raises Estimate for Cutting Motorola Jobs

Thursday, 04 October 2012 07:17 AM

Google Inc. revised up the bill for job cuts at its money-losing Motorola Mobility mobile phone unit in the third quarter and warned of further restructuring that may result in "significant" additional charges.

Google raised its estimates for severance-related charges 9 percent to $300 million from $275 million and warned it faced another $40 million in other costs in the quarter to quit facilities and markets.

"Motorola has continued to refine its planned restructuring actions and now expects to broaden those actions to include additional geographic regions outside of the U.S.," the company said in a statement.

Google bought Motorola last year for $12.5 billion, with the aim of bolstering its patent portfolio in the intellectual property fight its Android mobile system faces with rivals Apple Inc. and Samsung Electronics Co. Ltd.

But the Internet search giant has found itself lumbered with a restructuring headache, saying in August it would cut 20 percent of the Motorola Mobility workforce as it moves to make more smartphones and fewer simple mobiles.

"Motorola continues to evaluate its plans and further restructuring actions may occur, which may cause Google to incur additional restructuring charges, some of which may be significant," Google said.

The New York Times has previously reported that Google planned to shrink Motorola's operations in Asia by exiting unprofitable markets and abandon low-end devices to focus on a few models.

Last year's purchase of Motorola raised investor concerns at the time that the software firm was buying into a hardware business with much lower profit margins and in which it had little experience.

Analysts were expecting Google to wind down many of Motorola's legacy businesses to fit its strategy.

Google shares were marked up 0.3 percent at $764.85 in light trading before the bell on the Nasdaq on Thursday.

© 2018 Thomson/Reuters. All rights reserved.

1Like our page
Google Inc. said planned job cuts at its Motorola Mobility mobile phone unit will cost about $340 million in severance and other costs in the third quarter and it warned of further restructuring.
Thursday, 04 October 2012 07:17 AM
Newsmax Media, Inc.

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

© Newsmax Media, Inc.
All Rights Reserved