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    Home IT Management
    • IT Management

    Google’s Motorola Mobility Restructuring Could Be Expanded

    By
    Todd R. Weiss
    -
    October 4, 2012
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      Google is again looking at more ways to trim costs in its Motorola Mobility subsidiary, less than two months after the company announced an initial round of 4,000 Motorola layoffs in August.

      In an Oct. 4 filing with the U.S. Securities and Exchange Commission, Google reported that it has “continued to refine its planned restructuring actions and now expects to broaden those actions to include additional geographic regions outside of the U.S.”

      The filing, signed by Patrick Pichette, Google’s chief financial officer and senior vice president, also states that “further restructuring actions may occur, which may cause Google to incur additional restructuring charges, some of which may be significant.”

      Whether or not the latest filing means that additional layoffs, beyond the 4,000 announced in August, could be coming at Motorola Mobility is uncertain.

      In an email response to that question, a Google spokesperson wrote: “This filing was made to provide updated information around Motorola Mobility’s cost reductions that were announced earlier this summer.”

      The filing does not specifically mention that additional layoffs will come, but its language that “further restructuring actions may occur,” as well as the possibility that the company could “incur additional restructuring charges, some of which may be significant,” at least puts it into the realm of possibility.

      In the 8-K filing, Google also announced that it is raising its severance costs estimate to $300 million, up from the $275 million it estimated in August when it unveiled the layoffs.

      The Motorola layoffs announcement in August targeted about 20 percent of the unit’s 20,000-member workforce at that time. The job cuts came just three months after Google acquired Motorola Mobility for $12.5 billion in May.

      The August cuts also included about 30 Motorola facility closings. Two-thirds of the facility closings were slated at that time to occur outside the U.S. The company also stated at that time that it planned to close or consolidate about one-third of its 90 facilities, as well as simplify its mobile product portfolio–shifting the emphasis from feature phones to more innovative and profitable devices.

      The cuts are being made to try to reverse financial losses in the Motorola unit, which has lost money in 14 of the last 16 quarters, according to Google.

      In July, Google gave its first revenue report since officially acquiring Motorola Mobility, posting second-quarter revenue of $12.21 billion, which is a 35 percent increase from $9.03 billion in the second quarter of 2011. The company released its fiscal 2012 second-quarter results July 19. The quarter ended June. 30

      The $12.21 billion second-quarter revenue was up 15 percent from the first quarter of the year, when Google reported $10.65 billion in revenue, according to the company. GAAP (generally accepted accounting principles) net income reported in the second quarter of 2012 was $2.79 billion, compared with $2.51 billion in the second quarter of 2011.

      Much of the value in the purchase of Motorola was fueled by Google’s desire to bolster its own patent portfolio by bringing in Motorola’s estimated $5.5 billion worth of patent holdings.

      Those patents are seen by Google as assisting the company as it expands its reach into mobile hardware and services around the world, according to a recent SEC filing.

      Todd R. Weiss
      As a technology journalist covering enterprise IT for more than 15 years, I joined eWEEK.com in September 2014 as the site's senior writer covering all things mobile. I write about smartphones, tablets, laptops, assorted mobile gadgets and services,mobile carriers and much more. I formerly was a staff writer for Computerworld.com from 2000 to 2008 and previously wrote for daily newspapers in eastern Pennsylvania. I'm an avid traveler, motorcyclist, technology lover, cook, reader, tinkerer and mechanic. I drove a yellow taxicab in college and collect toy taxis and taxi business cards from around the world.
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