Web giant Google has confirmed that it plans to axe around 4,000 staff from Motorola Mobility’s workforce. The figure represents 20 per cent of the handset business’s total headcount. Two-thirds of the redundancies will take place outside of the US.
In addition, 94 facilities – which represent around a third of the handset firm’s worldwide offices – will be shut down as Google continues to overhaul its $12.5bn acquisition.
The move is part of a wider effort to bring Motorola Mobility back to profitability. The business has recorded a loss in 14 of its last 16 financial quarters. Most recently it recorded a GAAP operating loss of $233m in the quarter ended June 30, 2012, with a $192m loss made by the mobile segment and a $41m loss made by the home segment. This is despite revenues coming in at $1.25bn, ($843m from the mobile segment and $407m from the home segment).
Google said that it is preparing to incur a severance-related charge of up to $275m as a result of the redundancies, which it expects to be largely recognised in 3Q12.
The web giant already ousted former CEO Sanjay Jha, the man who revived Motorola’s devices business and led the company through its acquisition, in May of this year. Former Google Americas president Dennis Woodside replaced Jha and also overhauled the firm’s management with his own staff.