News Column

Google Moves Could Mean More Job Cuts at Motorola

Oct. 4, 2012

Wailin Wong


Google Inc. is expanding its restructuring efforts at Motorola Mobility and incurring a larger charge for job cuts at the smartphone maker than previously expected, the search giant said Thursday.

Motorola Mobility officials could not immediately say whether the changes would include more layoffs beyond the 20 percent global headcount reduction that Google announced in August. Two-thirds of those layoffs -- which eliminated 4,000 of 20,000 jobs -- took place outside of the U.S. Locally, the company cut 700 of 3,000 jobs in Libertyville and Chicago, representing about a 23 percent reduction.

The announcement came less than a month after Motorola Mobility said it was moving its headquarters from Libertyville to the Merchandise Mart in 2013.

Google, which acquired Motorola Mobility in May, disclosed in a Thursday regulatory filing that it expects to expand "planned restructuring actions ... to include additional geographic regions outside of the U.S." Google said it expects its severance-related charges to rise to about $300 million from the $275 million stated in August.

These charges will be recognized in the third quarter and accompanied by $90 million in charges related to closing down facilities and exiting certain markets.

The restructuring is aimed at restoring the profitability of Motorola Mobility's mobile devices unit. The changes also include closing or consolidating about one-third of the company's 90 facilities around the world.

The summer layoffs disqualified Motorola Mobility from collecting incentives under a 2011 agreement with Illinois, which extended tax credits of more than $10 million a year for 10 years in exchange for the company retaining a local workforce of 2,500 and making $600 million in investments. The incentives will be suspended until the company gets back to a headcount of 2,500 employees.

Google closed 0.7 percent higher at $768.05 on Thursday.

Source: (c)2012 the Chicago Tribune. Distributed by MCT Information Services.