Google plans to slash 4,000 jobs at Motorola

Google will slash about 4,000 jobs at its Motorola Mobility unit, which accounts for 20 percent of the staff at the company, Bloomberg reported.

Two-thirds of the reductions will come from outside the U.S., which falls under Larry Page's plans to streamline the company as it pushes into the hardware market.

According to Bloomberg, Google will also shut down about a third of Motorola Mobility’s 94 facilities. Apart from these, simplify Motorola's wireless product portfolio is also expected. Google said the severance cost will be no more than $275 million.

“Google is trying to focus on the broader array of smartphones,” Brian Wieser, a Portland, Oregon-based analyst at Pivotal Research Group, told Bloomberg. “The legacy feature phones, although still important in many countries like India, are not necessarily able to take advantage of Google’s competencies.”

According to the Guardian, the move is the first sign of a complete reorganisation under the ownership of Google.

"We're excited about the smartphone business," Dennis Woodside, Google's former Americas boss, told The New York Times. "The Google business is built on a wired model, and as the world moves to a pretty much completely wireless model over time, it's really going to be important for Google to understand everything about the mobile consumer."

According to The New York Times, some analysts are not sure about Google's capacity to survive in the "brutally competitive, low-margin" smartphone business.

“Ninety percent of the profits in the smartphone space are going to Apple and Samsung, and everyone else from Motorola to RIM to LG to Nokia are picking up the scraps of that 10 percent,” Charlie Kindel, a former manager at Microsoft, told The New York Times. “There’s no real sign that’s changing anytime soon.” 

The search giant Google completed its $12.5 billion acquisition of Motorola in May, which the Telegraph described as "a history in gadgets".

According to Guardian, Motorola once had a big share in the phone business before the arrival of smartphones, particularly the iPhone. Although it tried to recover by adopting Google's Android system for its smartphones early on, it has not been able to break Apple's dominance on key parts of the US smartphone market.

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