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Several months after completing its $12.5 billion acquisition of Motorola Mobility, Google is finally beginning to shape the mobile company for its own purposes by cutting the fat.
Motorola Mobility told employees yesterday that it would lay off 4,000 workers (or 20 percent of its global workforce) and close a third of its 94 offices, the New York Times reports. Additionally, the company will focus on developing a few devices, forgoing unprofitable low-end products, similar to the strategy Taiwanese phone maker HTC has employed.
The streamlining isn’t too surprising since Motorola Mobility has struggled with sales and profitability over the last few years. In Google’s recent Q2 earnings, Motorola Mobility reported an operating loss of $233 million on $1.25 billion in revenues (10 percent of Google’s total revenues).
The restructuring will cost Google no more than $275 million in the third quarter, according to an SEC filing from this morning. Google says it will provide “generous severance packages” and outplacement services for the affected Motorola employees.
So how will Motorola make consumers care about its products again? Dennis Woodside, the company’s new CEO, tells the NYT that it will focus on things like long-lasting batteries, better camera sensors, and technology that can figure out who nearby people are based on their voices. The company will also develop simple and emotional ads — like what Google has started doing recently (and which Apple has been doing for years) — that will focus on Motorola’s product strengths.
Big surprise, right? Motorola may be better off trying to figure out ways to surprise consumers and truly differentiate itself from the competition, instead of pursuing standard marketing and product upgrades.
Via The Next Web;Photo: Devindra Hardawar/VentureBeat