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Monday, August 13, 2012 - Page updated at 08:30 p.m.
Motorola Mobility to cut 20 percent of cellphone maker's workforce
By CLAIRE CAIN MILLER
The New York Times
SUNNYVALE, Calif. — Motorola Mobility, the ailing cellphone maker Google bought in May, told employees Sunday it would lay off 20 percent of its workforce and close a third of its 94 offices worldwide.
The cuts are the first step in Google's plan to reinvent Motorola, which has fallen far behind Apple and Samsung, and to shore up its Android mobile business and expand beyond search and software into hardware.
The turnaround effort will be a referendum on the management of Google CEO Larry Page, whose boldest move has been the $12.5 billion acquisition.
Though Google bought Motorola because of its more than 17,000 patents, which can defend against challenges to the Android operating system, it also planned to use Motorola to make its own smartphones and tablets.
One-third of the 4,000 jobs lost will be in the United States. The company plans to leave unprofitable markets, stop making low-end devices and focus on a few cellphones instead of dozens, said Dennis Woodside, Motorola's new chief executive.
"The Google business is built on a wired model, and as the world moves to a pretty much completely wireless model over time, it's really going to be important for Google to understand everything about the mobile consumer," said Woodside, who previously led Google's sales and operations for the Americas.
In addition to the coming cuts, Google has gutted Motorola management, letting go 40 percent of its vice presidents. It will shrink operations in Asia and India, and center R&D in Chicago, Sunnyvale and Beijing.
Woodside wants to make the company's products cool again by loading them with things like sensors that recognize who is in a room based on their voices and batteries that last for days.
But some wonder whether Google can succeed in the brutally competitive cellphone business.
"Ninety percent of the profits in the smartphone space are going to Apple and Samsung, and everyone else from Motorola to RIM to LG to Nokia are picking up the scraps of that 10 percent," said Charlie Kindel, a former manager at Microsoft who writes about the mobile industry.
Copyright © The Seattle Times Company
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