Google will be slashing more than 4,000 employees at Motorola Mobility in attempts to increase for revenue for investors. Google said Monday in a statement that it will also close or consolidate about one third of Motorola's 90.
Motorola, Inc. was an American multinational[5] telecommunications company based in Schaumburg, Illinois. After having lost $4.3 billion from 2007 to 2009, the company was divided into two independent public companies, Motorola Mobilityand Motorola Solutions on January 4, 2011. The company is most recognized for its RAZR cellular phone brand, and the more recent Motorola Droid.
The decrease in employees will represent about 20 percent of Motorola Mobility's 20,000 employees, and two-third of the slashing will take place outside of the U.S.
Motorola Mobility has not seen much of a revenue increase in 14 of the past 16 quarters.
Google claims that the changes will be made to overall increase profits in due time.
"While lower expenses are likely to lag the immediate negative impact to revenue, Google sees these actions as a key step for Motorola to achieve sustainable profitability," the company said in a filing with the Securities and Exchange Commission.
Google said it also will shift Motorola Mobility's focus from simple wireless phones to more profitable devices.
The revamping will run Google about $275 million in severance costs, which will largely be recognized during the third quarter.
Motorola has not produced a widely known phone product since 2005 with the introduction of the RAZR.
Google shares rose $7.20 to $649.20 in premarket trading.
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