Four thousand Motorola jobs to go

Google swings big axe over new acquisition

Google has confirmed it is to axe more than four thousand jobs from its Motorola subsidiary in what is seen as the search giant’s first steps towards full integration, and reinvention, of its new $12.5 billion acquisition. Since Google bought Motorola in May [2012] there has been much speculation in which direction it would take the ailing phone maker. But yesterday [12th August 2012] it confirmed that the first casualties of the shake up would be a fifth of the global workforce, with more than a thousand jobs axed in the USA alone, along with the closure of Motoroloa’s 94 international offices. Dennis Woodside, Motorola’s new CEO, is reported to have revealed the company’s new strategy as pinned on ditching unprofitable markets and low-end devices, and instead concentrating on making just “a few cellphones.”Before it was acquired by Google, Motorola had fallen way behind its biggest competitors – especially Apple and manufacturers of phones based on Google’s own Android O/S, particularly Samsung.

The turnaround of Motorola will be see as a test of the management style of Google CEO, Larry Page, and whether he can successfully expand beyond search and software into manufacturing.

At present around 90 per cent of profits from smartphone manufacturing go to Apple and Samsung, with the rest of manufacturers fighting for the crumbs.

Page’s task will be to break the duopoly’s stranglehold, particularly that of Apple, at the same time defending the dominance of Android.

In Google’s armoury are the 17,000-plus patents it has inherited from the Motorola takeover and which will give it a head start in making its own improved smartphones and tablets.

Meanwhile the search giant has radically slimmed down Motorola management, chopping two out of five vice presidents, while hiring its own senior executives.

In future, R&D will be centred in Chicago, Sunnyvale and Beijing, as operations in Asia and India are shrunk.

Much of the new innovation will come from a select dozen staff working for a division called Advanced Technology and Projects, headed by Regina Dugan from the Pentagon’s Defense Advanced Research Projects Agency.

For their part, other Android-using competitors such Sony, LG and HTC will be watching closely to see how the Motorola-Google operation evolves – and especially to see if Motorola gets special treatment from Google.

It’s also speculated that the search giant could imitate Apple and build a smartphone from scratch, perhaps by building a separate operating system for Motorola that other phone makers – who ccurently get Android for free – won’t be entitled to use.