Google Cuts One-Fifth Of Motorola Mobility Workforce In Effort To Make It Profitable

Two-thirds of the 4,000 positions being cut from the unit ' which primarily makes Android mobile phones ' will be outside the U.S., Google says this morning in an SEC filing. It also plans to close or consolidate a third of its 90 facilities as it shifts its emphasis from feature phones to what it calls 'more innovative and profitable devices.' Google says this will result in a severance-related charge of as much as $275M ' as well as other expenses ' most of which it expects to recognize in Q3. The company says that 'these additional charges could be significant,' but it can't say how high they might go. 'These changes are designed to return Motorola's mobile devices unit to profitability, after it lost money in fourteen of the last sixteen quarters,' Google says. Still, it warns that 'investors should expect to see significant revenue variability for Motorola for several quarters. While lower expenses are likely to lag the immediate negative impact to revenue, Google sees these actions as a key step for Motorola to achieve sustainable profitability.' Last year Google agreed to pay $12.5B for Motorola Mobility, which is also a leading manufacturer of cable set top boxes. Google shares are up slightly in pre-market trading.