Google subsidiary Motorola is to set to undergo the knife as its new owners seek to turn the ailing smartphone makers fortunes around, repots the New York Times. In all, around 4,000 Moto staff are to face the cut, while the company will also lose up to a third of its offices around the globe. According to Motorola’s new CEO Dennis Woodside, the moves are aimed at shifting the company away from low-end handsets so it can focus on developing, fewer, but better handsets.
“We have a right to compete in this market,” said Gary Briggs, Google’s former consumer marketing chief, and now Moto’s. “I think we’ve got to prove why we’re going to build and bring devices to people that are worth talking about again.”
Motorola’s phone business has recorded losses in the last 14 of the last 16 quarters as it has struggled to compete with the muscle of both Apple and Samsung. Between them, the two tech giants rake in a massive 90 percent of the profits in the cutthroat smartphone segment. This leaves only 10 percent of the profit from smartphones to be shared among the remaining contenders including Sony, HTC, Nokia and LG among numerous others. Although Google paid over $12 billion for Motorola, it was motivated in large part by Motorola’s 17,000 strong patent portfolio, which it plans to use to defend Android from litigation.
Google, however, maintains that at the same time, it will not offer Motorola any special favors as it tries to reassure its Android partners that its acquisition of Motorola will not come at their expense. Motorola may, however, still get certain priority access to desktop operating systems. Speculation is also centering on the possibility that it could attempt to develop a complete phone and new operating system in-house, in an effort to control the complete end-to-end user experience in the same way Microsoft hopes to emulate Apple with its Surface tablet.
While compensation packages have not yet been discussed for staff being let go, it will be interesting to see how Google handles the process.
