Google already announced it would be laying off around 20 percent of Motorola Mobility’s workforce in August, but now Google expects it will be cutting even more jobs as a part of Motorola’s restructuring.
Fierce Wireless is reporting that Google expects to book its severance costs at around U.S.$300 million, more than its initial estimates of U.S.$275 million. Initially, Google announced that two-thirds of the job cuts would come from outside the U.S., but its most recent filing with the Securities and Exchange Commission states it will broaden its restructuring actions to include “additional geographic regions outside of the U.S.”
Yankee Group Senior VP of Research Wally Swain comments
“The question about Google-Motorola was always about strategy. Sometimes we feel like China-watchers or like Kremlin-watchers during the Cold War taking snippets of facts and trying to discern the plan behind the actions. Was the Motorola purchase just an IPR play? Does Google plan to produce reference devices? Does Google plan a full-blown competitor that gets the company back closer to Motorola’s traditional place in the manufacturers’ ‘league table’ even though that would mean battling other Android vendors? Does Google even care that Motorola makes money?
Announcing an expansion of the layoff costs may just be a refinement of the estimates, but it is more likely an expansion of the program. That reduces the strategic uncertainty somewhat. Yes, Google is not prepared to fund Motorola’s losses indefinitely. That probably means the concept of a full-blown competitor is off the table so Google is not planning to do battle with Samsung, HTC, LG and other Android manufacturers. That still leaves the ‘reference design-house’ as an option and this is the one we view as most likely. If all Google wanted was the IPR portfolio, they would close Motorola completely or license the brand to some company from Shenzhen.”
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