Motorola to axe 4,000 jobs in attempt to return to profitability

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A fifth of global workforce to go and 30 of its facilities to close or be consolidated, with emphasis shifting from feature phones to higher-end devices

Motorola Mobility is to reduce its global staff headcount by 4,000 employees, with two thirds of the reduction set to occur outside of the US.

It also plans to close or consolidate around one third of its 90 facilities, as well as simplify its mobile product portfolio – shifting the emphasis away from low-end mobile handsets to “more innovative and portable devices”.

Motorola said the changes are designed to return its mobile devices unit to profitability, after it suffered a loss in 14 of the past 16 quarters, with investors expecting to see significant revenue variability for the company for several quarters.

In the three months ending June 30, Motorola Mobility made an operating loss of $199m (£128.4m) in its first financial announcement since it was bought by Google in May for $12.5bn (£8bn).

The loss in the mobile phone segment contributed to a total loss of $233m (£150.2m) for the Google subsidiary, with the division announcing overall Q2 revenues of $1.25bn (£800m).

The manufacturer added it will provide “generous” severance packages and outplacement services to help affected employees find new jobs.

“Motorola understands how hard these changes will be for the employees concerned and is committed to helping them through this difficult transition,” a statement added.

Motorola employs 250 staff in the UK across its sites in Basingstoke, Livingstone and Swindon.

Google said severance-related charges should not exceed $275m (£175m), which will be largely shown in the third quarter. The remaining costs will be recognised before the end of the year.

It added it also expects to incur other restructuring charges, the majority of which will be recognised during Q3, but added that although it can’t currently predict the amount of these other charges, they could be significant.

 

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