Google's (NASDAQ:GOOG) Motorola Mobility unit is cutting around 1,200 more jobs, or 10 percent of its workforce, as its continues to restructure and find its identity inside the search giant.
The layoffs come on top of the 4,000 job cuts Motorola announced last August, which amounted to 20 percent of the company's workforce. The new job cuts will affect employees in the U.S., China and India, according to the Wall Street Journal, which first reported the cuts. "These cuts are a continuation of the reductions we announced last summer," Motorola said in a statement distributed to multiple media outlets. "It's obviously very hard for the employees concerned, and we are committed to helping them through this difficult transition."
According to the Journal, Motorola staffers found out about the job cuts this week via email and were told that "while we're very optimistic about the new products in our pipeline, we still face challenges." The company email also said that "our costs are too high, we're operating in markets where we're not competitive and we're losing money."
Motorola said in December that it would shut down its mobile development and operations in South Korea and will cut most of its staff in the country this year. The unit has been bleeding cash for several quarters. Motorola's mobile business reported an operating loss of $353 million, or 23 percent of the unit's revenue, in the fourth quarter of 2012. That came on top of an operating loss of $527 million in the third quarter.
In late February at an investor conference Google CFO Patrick Pichette said the products in Motorola's pipeline are "not really to the standards that what Google would say is wow--innovative, transformative."
"We've inherited 18 months of pipeline that we actually have to drain right now, while we're actually building the next wave of innovation and product lines," he said, echoing comments he made in late January on Google's fourth-quarter earnings conference call. "We have to go through this transition. These are not easy transitions."
Motorola recently confirmed in a job listing that it is seeking a senior director of product management to manage the launch of what is widely believed to be the division's rumored X-Phone, an advanced Android device. Some analysts think that even though Google has pledged to keep the Motorola unit separate from its development of Android mobile software, Google may pour more resources into the unit as a hedge against Samsung Electronics, the largest and powerful Android device maker.
In December the Journal reported that Google was working on X-Phone and X-Tablet devices, citing unnamed sources, but said Google was running into issues related to manufacturing and supply-chain management. At the time, Motorola CEO Dennis Woodside, a former Google top sales executive, declined to discuss products under development but told the Journal that the company is "investing in a team and a technology that will do something quite different than the current approaches." The report said the devices represented the first true partnership between Google and Motorola since Google bought the firm or $12.5 billion. The report indicated the devices would be based on Android and would have advanced camera capabilities, bendable screen technology and other enhancements.
For more:
- see this WSJ article (sub. req.)
- see this Bloomberg article
- see this Reuters article
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