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Google Cuts 10% Of Workforce At Motorola Mobility Unit: WSJ

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3/8/2013 2:56 AM ET

Search engine giant Google Inc.'s (GOOG: Quote) Motorola Mobility hardware unit has started laying off about 1,200 jobs or 10 percent of its workforce, the Wall Street Journal reported Friday citing a company email. The move is part of the smartphone maker's effort to return to profitability.

The company email was quoted as saying, "our costs are too high, we're operating in markets where we're not competitive and we're losing money." The layoffs will affect workers in the U.S., China and India.

Google has been facing pressures from the Motorola Mobility business it acquired for $12.5 billion in May last year, in a move to focus on handset business. In August last, Google had said it would cut 4,000 employees, or 20 percent of the Motorola workforce, and in December, Arris Group Inc. (ARRS) agreed to buy the Motorola Home unit for $2.35 billion.

The mobile device unit had also planned to close or consolidate about one-third of its 90 facilities, as well as simplify its mobile product portfolio.

In January end, Google had reported a better-than-expected increase in fourth-quarter profit, as it benefited from strong advertising revenues and lower income tax, partly offset by charges related to Motorola business.

Motorola Mobility revenues in the fourth quarter were $1.51 billion, accounting for 11 percent of consolidated revenues in the quarter, even as the unit ran an operating loss of $353 million.

According to ComScore Inc. (SCOR), Google, the provider of world leading mobile Android software, had a 67 percent share of the market in the U.S. in December, compared with 16 percent for Microsoft Corp. (MSFT) and 12 percent for Yahoo! Inc. (YHOO).

GOOG closed Thursday's regular trading at $832.60, up 0.15 percent on the Nasdaq.

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by RTT Staff Writer

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