Google Bleeds Out 1,200 More Motorola Mobility Employees
Google (NASDAQ: GOOG) has begun handing pink slips to some 1,200 Motorola Mobility workers, or about 10 percent of its roster, according to a report in The Wall Street Journal, as the search giant struggles to plug the leaks and steady its behemoth acquisition. The layoffs, which hit workers in the United States, China and India, come on the heels of a 4,000 workforce reduction last August.
Terminated employees were informed via a company email, acquired by the Journal, which blamed the layoffs on high costs, an inability to compete in the marketplace and financial losses.
At the Morgan Stanley Technology, Media and Telecom Conference in San Francisco last week, Patrick Pichette, Google senior vice president and chief financial officer, spoke at length about Google’s issues with the Motorola acquisition. Here’s a portion of what he said, in which he suggested that this most recent Motorola layoff might not be the last of it. And, based on Pichette’s comments, if you were thinking a mind-blowing smartphone was coming out of Motorola anytime soon, you might not want to hold your breath on that one:
“The case for Motorola … we’ve inherited a pipeline. Motorola has a great set of assets and it had a pipeline of products that were fine but not really to the standards of what Google would say is wow—innovative, transformative. So we have been working really hard … to take a hold of Motorola, really kind of putting it on a trajectory that’s much more of what we believe at Google is the right mindsets, the right time frame. We’ve inherited 18 months of pipeline that we actually have to drain right now while we’re building the next wave of innovation and product line. We have to go through this transition, these are not easy transitions…for the last few quarters you’ve seen the announcements of restructurings and rationalizations of product lines and this kind of has to continue over the next few quarters while we actually make that crossover. There’s still hard work to be completed at Motorola before we see tangible signs. We also are very optimistic, since day one we started working on the next agenda and we see that pipeline kind of showing up.”
It doesn’t sound as though Motorola Mobility will be making money anytime soon, does it? Google bought Motorola Mobility for $12.5 billion last year, its largest acquisition ever, in part for its 17,000-strong patent collection. Since the acquisition was finalized last May, Motorola has dumped more than $1 billion in losses.