Google warns of more job cuts, higher costs in Motorola restructuring

Google (NASDAQ:GOOG) said it expects more job cuts and higher costs as part of the restructuring of its Motorola Mobility unit, beyond what it detailed in August.

Google said in August it would slash around 4,000 jobs Motorola, or 20 percent of the unit's workforce, and said that two-thirds of the cuts are expected to come from outside the United States. The announcement came just three months after Google's $12.5 billion acquisition of Motorola closed in May.

In a filing with the Securities and Exchange Commission today, Google said that it now expects to "broaden those actions to include additional geographic regions outside of the U.S." Google said it now expects to book severance costs of $300 million, above the $275 million it originally forecasted. The company also said it will take a charge of $90 million related to closing facilities and exiting markets this year and next, and around $40 million of those costs will be booked in the third quarter of this year.  

"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.

Google executives have emphasized that Motorola will focus on a slimmer portfolio of devices than it has in the past. Google has also taken steps to reshape Motorola--40 percent of Motorola's vice presidents are gone and the company plans to move from its longtime headquarters in Libertyville, Ill., to a new office in downtown Chicago's Merchandise Mart area. Google and Motorola have said the cuts are necessary to return the unit's device division to profitability. When Google made the acquisition, many analysts worried about the software giant swallowing a hardware company with lower margins.

Motorola was once the world's second largest cell phone maker, but the company has since been eclipsed by the likes of Apple (NASDAQ:AAPL), Samsung Electronics and others. Motorola in the second quarter accounted for just 2 percent of the globe's cell phone shipments, according to ABI Research.

For more:
- see this SEC filing
- see this WSJ article (sub. req.)
- see this Reuters article

Related Articles:
Motorola partners with Intel for Razr i smartphone
$99 Droid Razr M at center of Google's coming out party for Motorola
Google to axe 4,000 Motorola jobs in restructuring
Google: Motorola's patents worth $5.5B
Google promises 'changes' at Motorola, but mum on details