Recent Google acquisition Motorola Mobility is about to be “reinvented,” with the Mountain View company announcing Sunday that it would lay off 20 percent of the subsidiary’s work force and close a third of its 94 offices worldwide, The New York Times reported Monday. The cuts are the first step to reinvigorate the mobile device company after it has spent years falling behind rivals Apple and Samsung.
Google’s purchase of Motorola Mobility was driven both by the latter company’s extensive patent portfolio — Motorola holds more than 17,000 patents, most related to mobile device technology — and by a desire to have a hand in creating new mobile hardware based on Google’s Android software platform.
With the company struggling against devices from competitors such as Apple and Samsung, however, Google felt that drastic action was needed to remain competitive.
“Ninety percent of the profits in the smartphone space are going to Apple and Samsung, and everyone else from Motorola to RIM to LG to Nokia are picking up the scraps of that 10 percent,” Charlie Kindel, a mobile industry journalist and former Microsoft manager, told The New York Times.
The 20 percent employment cut will equate to the loss of about 4,000 jobs, one-third of which are based in the United States. These employee accompany drastic changes in the company’s management as well, with Google eliminating over 40 percent of its vice president positions and hiring new senior executives.
Not insensitive to the current job and economic climate, Google has stated that the company will do what it can to accommodate the workers lost to the restructuring:
“Motorola is committed to helping [the employees] through this difficult transition and will be providing generous severance packages, as well as outplacement services to help people find new jobs,” a Google spokeswoman explained.
Motorola CEO Dennis Woodside
Dennis Woodside, Motorola’s new chief executive, now plans to cut the number of the company’s products as well, reducing Motorola’s product line to just a few higher-end models down from 27 models released in the last year.
A newly-created group inside Google, called “Advanced Technology and Projects” will be responsible for the new ideas that Google hopes will reinvigorate Motorola. Run by former DARPA executive Regina Dugan, the small group of a few dozen programmers, designers, and strategists has a large task in front of them. “It’s a small, lean and agile group that is unafraid of failure,” Ms. Dugan said. The group will “celebrate impatience.”
Changes to the company’s marketing are also planned, with the goal of making advertising simpler and “more emotional,” according to Gary Briggs, who now runs consumer marketing for the company.
“We have a right to compete in this market,” Mr. Briggs said, “and I think we’ve got to prove why we’re going to build and bring devices to people that are worth talking about again.”
Despite Google’s purchase and investment in Motorola Mobility the company does not want to anger Android partners, many of which have been crucial in stemming the tide against Apple’s iOS. While the possibility of a new product, designed completely under Google’s supervision remains, the company has promised hardware partners that it will compete equitably and that Motorola will have no unfair advantages.
Teaser graphic made with help from Shutterstock.