When Google first announced it was looking to acquire Android partner Motorola Mobility questions were not only raised about how such a move would affect the balance of power in the Android ecosystem, but also how it would affect Motorola employees. Immediately following the finalization of the merger rumours began to swirl that Google was taking a “listening tour” of Motorola, getting fresh eyes on Motorola’s corporate make-up and taking stock of what people actually do there. Unfortunately for Motorola employees, it looks like the tour has ended.
Although first reported by the New York Times, Google confirmed yesterday that it will be slashing 20 percent of Motorola’s workforce—some 4,000 people—and shut down approximately one third of its offices worldwide in an effort to streamline the company and return it to profitability.
But the changes didn’t stop there, as Google also announced a radical shift in Motorola’s mobile business strategy, simplifying the company’s product portfolio–moving away from feature phones to “more innovative and profitable devices.”
Having been the victim of corporate restructuring myself, I always find it lamentable that real people are the victims of corporate streamlining, meaning that while I wish I could fault companies like Google for cutting deep into Motorola’s workforce in an effort to restore profitability, it’s likely the same steps any company would take following such a landmark acquisition.
If it comes as any reprieve for the rank-and-file who are often the sole victims of this sort of restructuring, the New York Times has also announced that Google has gutted Motorola’s upper management as well, letting go of 40 percent of the company’s vice presidents.
That said, its clear that Google, a company with the informal motto “Don’t be Evil,” acknowledges the hardship that such restructuring puts on employees, and made it clear that such because pink slips are imminent, it still cares about its people. “Motorola is committed to helping them (the employees) through this difficult transition and will be providing generous severance packages, as well as outplacement services to help people find new jobs,” the search engine giant said in a statement.
Of the 4,000 jobs to be cut, two-thirds of those will come from outside the United States, Google said in a filing with the U.S. Securities and Exchange Commission, with the company looking to drastically reduce its operations in Asia and India, focusing its research and development centres in Chicago, Sunnyvale, CA, and Beijing.
Beyond the deep cuts, Motorola is to undergo a drastic overhaul in its mobile focus as well, abandoning unprofitable markets and stopping the production of low-end devices, focusing instead on a few key smartphone lines—a strategy, it should be said, that both Samsung and Apple have found great success with.
In the end, it’ll be some time before these changes show any financial return, given the fact that millions are being dedicated to severance packages with hundreds of millions more needed to implement Motorola’s new mobile strategy, but I’ll certainly be interested to see if Google can turn these deep cuts into strong gains for Motorola Mobility.