Citing high costs, competitive markets and declining profitability, Google (NASDAQ:GOOG) announced that it would be slashing 1,200 jobs from its Motorola Mobility division, a number which represents about 10 percent of the department’s workforce.
Since Google’s purchase of Motorola in 2011, it has been consistently slimming its workforce down. So far, about 20 percent, or 4,000 workers, have been laid off from the division. Google spent $12.5 billion on Motorola, mainly as a defensive maneuver to protect itself from legal attacks being made to its Android mobile platform.
The cuts hardly come as a surprise. A spokesman for Motorola told The Wall Street Journal: ”These cuts are a continuation of the reductions we announced last summer. It’s obviously very hard for the employees concerned, and we are committed to helping them through this difficult transition”.
In the fourth quarter, Motorola had revenues of $1.51 billion, a dip over previous quarters, and it reported a $353 million operating GAAP loss, according to TechCrunch. Google has moved its executives around to help run Motorola, but the company has yet to reverse its losses.
However, Motorola could be a particularly useful asset for Google in competing against other high-caliber mobile manufacturers running Android, such as Samsung. It’s no news that Google has been contemplating raising its stakes in the mobile market, and Motorola could be an ideal vehicle for that.
As of right now, Motorola still has about 10,000 employees on its payroll, and will likely continue to move and morph on its way to becoming profitable once again.