Google: Motorola cuts costing us $340m, but they’re only the start

Oct 4, 2012
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Google has warned that more cuts at Motorola are in the pipeline, with the search giant already facing a roughly $340m bill in Q3 2012 for severance payments and other fees. The restructuring is now set "to include additional geographic regions outside of the US" Google said in a new regulatory filing, cautioning that such further changes "may cause Google to incur additional restructuring charges, some of which may be significant."

"Based on current information, Google expects to incur (1) severance-related charges of approximately $300 million, which will be recognized in the third quarter of 2012 and of which approximately $250 million is expected to be paid in cash, and (2) other charges related to facility and market exits, primarily in cash, of approximately $90 million in 2012 and 2013, of which approximately $40 million is expected to be recognized in the third quarter of 2012. 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 8-K amendment, October 2012

Google confirmed plans to trim roughly a fifth of the Motorola Mobility workforce back in August, with a third of the cuts tipped to affect the US. Other impacted territories are Asia and India, with cuts in R&D spending across various locations in Chicago, Sunnyvale, and Beijing.

The economy drive is expected to see Motorola trim its scattershot approach to devices, and instead focus on a more select range of hardware. That echoes the so-called Hero Device strategy HTC announced in recent months, though neither company has been especially successful in the face of Apple and Samsung of late.

Google has not said where the next cuts will take place, nor what timescale they will be enacted over. Motorola Mobility was a $12.5bn acquisition for the company, in a deal predicted to see Motorola's Android device production brought more closely in-line with Google's own vision for the platform's development.

[via Reuters]


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