Google raises Motorola cuts bill

GOOGLE HAS revised upwards the bill for job cuts at its money-losing Motorola Mobility mobile phone unit in the third quarter…

GOOGLE HAS revised upwards the bill for job cuts at its money-losing Motorola Mobility mobile phone unit in the third quarter and warns of further restructuring that may result in “significant” additional charges.

Google raised its estimates for severance-related charges by 9 per cent to $300 million from $275 million and warned it faced $40 million more in other costs in the quarter to quit facilities and markets.

“Motorola has continued to refine its planned restructuring actions and now expects to broaden those actions to include additional geographic regions outside of the US,” the company said in a statement.

Google bought Motorola last year for $12.5 billion, with the aim of bolstering its patent portfolio in the intellectual property fight its Android mobile system faces with rivals Apple and Samsung Electronics. However the internet search giant has found itself lumbered with a restructuring headache, saying in August it would cut 20 per cent of the Motorola Mobility workforce as it moves to make more smartphones and fewer simple mobiles.

READ MORE

“Motorola continues to evaluate its plans and further restructuring actions may occur, which may cause Google to incur additional restructuring charges, some of which may be significant,” Google said.

The New York Times has previously reported that Google planned to shrink Motorola’s operations in Asia by exiting unprofitable markets and abandoning low- end devices to focus on a few models. – (Reuters)