Couple of interesting and different approach.. First time we are seeing that majority of layoffs will be outside of United States. Most of the Layoffs are in US for most of the technology companies in order to save cost and doom themselves further down the drain... That way it was smart move from Google... at least in my view..
Next.. is not so smart move though it may seem to most of other folks. I don't think it is great idea to get rid of so called 'feature phones'. If you are truly innovative then you don't want to limit innovation only to high end devices like smart phones and tablets. These feature phones are still consumed a lot by masses and they also need to be in touch with latest and greatest. Moreover, there is lot of budding customers for you in this segment. If you really come up with something useful and innovative for them.. something like android lite with simple browser and messaging based connectivity they would still love you. I am not talking MBA here.. and as per all the theories I may be wrong, but first sign of any companies demise is when they start going after profitability instead of overall growth. It works well in short term to increase your profit margin and keep only high margin product lines, but it eventually leads to disruption of overall company's culture and values. Company is only focussed on pleasing stock holders after that and they often forget customers' real interest.
Silver lining of all this.. I hope to see some real cool gadgets and phones in coming days. I loved Motorola's phones.. they were really great when it comes to just core features of phones.. however, they didn't continued that sprit for smart phones or tablets.. I hope Google's magic will fix it.
Cheers!!!
KEVIN LAMARQUE/REUTERS
Buying Motorola was one of the first big moves by Google co-founder Larry Page after he became CEO last year. Google dominates the Internet search industry but the company has acknowledged that its business is still centered on desktop computers and needs to expand in the growing mobile sector.
Along with replacing some of Motorola’s top executives, Google confirmed Monday that it has hired a former official at the U.S. military’s renowned Defense Advanced Research Projects Agency to run a Sunnyvale-based research team charged with developing new technology features for Motorola phones.
Although the company did not provide many details, Google’s announcement represents more of a glimpse into its plans for the Motorola division than it has offered before now. Analysts said the company faces numerous challenges and it’s still not clear if Google’s investment will pay off.
“It’s not going to be easy, but there’s a lot of things they can do,” said Will Stofega at research firm IDC.
The Motorola division also makes television settop control boxes, which Stofega said could help Google in its goal of building a home-entertainment business. But he warned that rival companies are developing new gadgets at a rapid pace, while Motorola seems to be drifting.
“They’ve got to get going,” he said.
Google said last year that it bought the Motorola division for its sizable trove of technology patents, to help counter a wave of patent lawsuits filed against Google by Apple and other competitors.
While it has little experience making hardware, analysts said Google also hoped to follow Apple’s model of designing its own gadgets to get the most performance from its own software. Google’s Android mobile software is already used by Motorola and several other smartphone makers.
But if Motorola was known for cutting-edge phones in the past, its sales and reputation have not kept pace with Samsung, Apple and others in recent years. The division had an operating loss of $233 million in the last fiscal quarter, the first since the acquisition closed, which lowered Google’s overall profit margin.
Google’s stock gained nearly 3 percent Monday, though the company warned it will incur $275 million in costs for severance benefits to affected employees.
“We believe these pending actions make sense, given Google’s recent purchase of Motorola and that unit’s lack of profitability over a number of quarters in the past couple of years,” analyst Scott Kessler of S&P Capital IQ wrote in a note.
Contact Brandon Bailey at 408-920-5022; follow him at Twitter.com/brandonbailey.
Next.. is not so smart move though it may seem to most of other folks. I don't think it is great idea to get rid of so called 'feature phones'. If you are truly innovative then you don't want to limit innovation only to high end devices like smart phones and tablets. These feature phones are still consumed a lot by masses and they also need to be in touch with latest and greatest. Moreover, there is lot of budding customers for you in this segment. If you really come up with something useful and innovative for them.. something like android lite with simple browser and messaging based connectivity they would still love you. I am not talking MBA here.. and as per all the theories I may be wrong, but first sign of any companies demise is when they start going after profitability instead of overall growth. It works well in short term to increase your profit margin and keep only high margin product lines, but it eventually leads to disruption of overall company's culture and values. Company is only focussed on pleasing stock holders after that and they often forget customers' real interest.
Silver lining of all this.. I hope to see some real cool gadgets and phones in coming days. I loved Motorola's phones.. they were really great when it comes to just core features of phones.. however, they didn't continued that sprit for smart phones or tablets.. I hope Google's magic will fix it.
Cheers!!!
GOOGLE’S ADDITION AND SUBTRACTION
4,000 jobs to be cut at Motorola Mobility
Net giant aims to make unit profitable; bulk of layoffs will be overseas
By Brandon Bailey
bbailey@mercurynews.com
MOUNTAIN VIEW — When Google spent $12.5 billion to buy Motorola’s phone business, the Internet search giant said it was investing in a portfolio of valuable patents and hoping to gain firsthand experience in building mobile gadgets.
But Google also wants to make a profit, as it made clear Monday by announcing it will cut 4,000 jobs at Motorola Mobility, or about 20 percent of the workforce at the Illinois-based business.
Google said the layoffs — an unusual move for the Internet company — are part of a broader overhaul aimed at turning around the struggling phone business it acquired last year. “These changes are designed to return Motorola’s mobile devices unit to profitability, after it lost money in 14 of the last 16 quarters,” Google said in a regulatory filing.
About two-thirds of the job cuts will be made outside the United States, as Google moves to close a third of the division’s 90 facilities around the world. Google also said it will phase out lower-end Motorola models known as “feature phones” in favor of smartphones and other handheld gadgets that are “more innovative and profitable.”
4,000 jobs to be cut at Motorola Mobility
Net giant aims to make unit profitable; bulk of layoffs will be overseas
By Brandon Bailey
bbailey@mercurynews.com
MOUNTAIN VIEW — When Google spent $12.5 billion to buy Motorola’s phone business, the Internet search giant said it was investing in a portfolio of valuable patents and hoping to gain firsthand experience in building mobile gadgets.
But Google also wants to make a profit, as it made clear Monday by announcing it will cut 4,000 jobs at Motorola Mobility, or about 20 percent of the workforce at the Illinois-based business.
Google said the layoffs — an unusual move for the Internet company — are part of a broader overhaul aimed at turning around the struggling phone business it acquired last year. “These changes are designed to return Motorola’s mobile devices unit to profitability, after it lost money in 14 of the last 16 quarters,” Google said in a regulatory filing.
About two-thirds of the job cuts will be made outside the United States, as Google moves to close a third of the division’s 90 facilities around the world. Google also said it will phase out lower-end Motorola models known as “feature phones” in favor of smartphones and other handheld gadgets that are “more innovative and profitable.”
KEVIN LAMARQUE/REUTERS
Buying Motorola was one of the first big moves by Google co-founder Larry Page after he became CEO last year. Google dominates the Internet search industry but the company has acknowledged that its business is still centered on desktop computers and needs to expand in the growing mobile sector.
Along with replacing some of Motorola’s top executives, Google confirmed Monday that it has hired a former official at the U.S. military’s renowned Defense Advanced Research Projects Agency to run a Sunnyvale-based research team charged with developing new technology features for Motorola phones.
Although the company did not provide many details, Google’s announcement represents more of a glimpse into its plans for the Motorola division than it has offered before now. Analysts said the company faces numerous challenges and it’s still not clear if Google’s investment will pay off.
“It’s not going to be easy, but there’s a lot of things they can do,” said Will Stofega at research firm IDC.
The Motorola division also makes television settop control boxes, which Stofega said could help Google in its goal of building a home-entertainment business. But he warned that rival companies are developing new gadgets at a rapid pace, while Motorola seems to be drifting.
“They’ve got to get going,” he said.
Google said last year that it bought the Motorola division for its sizable trove of technology patents, to help counter a wave of patent lawsuits filed against Google by Apple and other competitors.
While it has little experience making hardware, analysts said Google also hoped to follow Apple’s model of designing its own gadgets to get the most performance from its own software. Google’s Android mobile software is already used by Motorola and several other smartphone makers.
But if Motorola was known for cutting-edge phones in the past, its sales and reputation have not kept pace with Samsung, Apple and others in recent years. The division had an operating loss of $233 million in the last fiscal quarter, the first since the acquisition closed, which lowered Google’s overall profit margin.
Google’s stock gained nearly 3 percent Monday, though the company warned it will incur $275 million in costs for severance benefits to affected employees.
“We believe these pending actions make sense, given Google’s recent purchase of Motorola and that unit’s lack of profitability over a number of quarters in the past couple of years,” analyst Scott Kessler of S&P Capital IQ wrote in a note.
Contact Brandon Bailey at 408-920-5022; follow him at Twitter.com/brandonbailey.
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