Motorola Mobility Preps for Google Deal, Sheds 800 JobsNovember 1, 2011 12:17 am ·
Today, sources have revealed that Motorola Mobility, a division of Motorola that Google intends to buy for $12.5 billion, plans to shed 800 jobs in order to prepare for the deal.
According to a filing with the SEC by Motorola Mobility Holdings, the company’s management has agreed to move forward with a “workforce reduction” at a cost of “approximately” $31 million. Motorola says this is initiative is an effort to cut costs and that the $31 million price tag will be composed of $27 million in severance pay and $4 million in shutdown costs for the facilities in which the employees used to work.
The layoffs are set to take place by the end of the year.
This news comes in light of a reported loss of $32 million by Motorola Mobility, despite the fact that the company raised $3.3 billion in revenue in the first three quarters of 2011.
However, considering the fact that Motorola Mobility shareholders are scheduled to vote on the Google deal on November 17th—assuming regulatory approval is a given—chances are this round of layoffs is more of a preparatory measure than a reactionary one, especially considering the fact that handset and smartphone shipments are up 20 percent and 52 percent respectively when compared to the same time period in 2010.
SiliconAngle writer Mellisa Tolentino observes, “It’s not surprising that Motorola is undergoing some downsizing as it finalizes the acquisition deal with Google.” Referring to the layoffs specifically—which equates to 5 percent of the company’s workforce—Tolentino understatedly continues, “This is an unfortunate byproduct.”
So, to sum it up, Motorola is spending $31 million (a mere $1 million less than its total losses this year) to get rid of 800 workers and prepare for being acquired by Google, whose interest in Motorola Mobility is largely contingent on the thousands of patents that it will acquire along with the Motorola division.