Owner Google says costs are too high
A further 10 per cent of jobs at Google’s Motorola Mobility subsidiary are to be axed on top of the 4,000 jobs lost last August after the search giant acquired the company. According to the Wall Street Journal, an email circulated internally within Motorola Mobility warns that most of the 1,200 redundancies will be at plants in the USA, China and India as Google switches to making more profitable smartphones instead of simple handsets. The email is said to have told workers, “Our costs are too high, we’re operating in markets where we’re not competitive and we’re losing money.”
Google bought the loss-making mobile handset maker for $12.5 billion last year , its largest acquisition ever, in a move aimed at using Motorola Mobility’s patents to fend off legal attacks on its Android mobile platform, while also expanding beyond its pure search operations.
At the time, the acquisition raised concerns on Wall Street that Google was entering into a business with much lower profit margins, a concern that now seems justified.
Neither Google nor Motorola has commented on the reports.