Motorola Mobility Could See 'Significant' Restructuring Charges as Layoffs Loom

By

Google has warned that its Motorola Mobility unit could see “significant” restructuring charges. But it appears the company is not increasing the number of previously announced layoffs.

Google is planning to let go of workers at Motorola – and announced this week it will make some of the layoffs at Motorola Mobility locations outside of the United States.


Image via Shutterstock

The company also will take $390 million in costs connected to the layoffs, company filings said.

“Motorola has continued to refine its planned restructuring actions and now expects to broaden those actions to include additional geographic regions outside of the U.S.,” according to a recent SEC filing by Google – Motorola Mobility’s parent company.

 “Based on current information, Google expects to incur 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 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,” the filing added.

Google released a statement this week that said, "This filing was made to provide updated information around Motorola Mobility's cost reductions that were announced earlier this summer." 

The Associated Press reported that Google is not adding to the 4,000 layoffs it announced for Motorola in late August. Google plans to close or consolidate about one-third of Motorola's 90 locations.

In August, Google said Motorola Mobility would cut 20 percent of its workforce.

In May, Google acquired Motorola Mobility, which manufactures cell phones and cable set-top boxes, for $12.4 billion. The company has a rich patent portfolio.

In its report on the recent SEC filing, Reuters News Service said that “Google's broader plan for the money-losing cell phone maker remained unclear.”

"There's some lack of fully understanding beyond those patents what there is for Google to do with Motorola," Needham & Company analyst Kerry Rice said.




Edited by Brooke Neuman

TechZone360 Contributor

SHARE THIS ARTICLE
Related Articles

How Real is Telecom Network Transformation: From Legacy to Leading Edge by When?

By: Cynthia S. Artin    11/7/2018

Last week, ABI Research issued its latest report and forecasts in the network orchestration domain, asserting that while a disruption in orchestration…

Read More

What's New in Artificial Intelligence

By: Paula Bernier    11/5/2018

A brief look at what's new in the world of artificial intelligence as it relates to IT operations; customer engagement; marketing analytics; and cloud…

Read More

IBM Makes $34B Bet with Red Hat

By: Paula Bernier    10/29/2018

IBM plans to purchase Red Hat in a $34 billion deal. Big Blue says its combination with the open source pioneer will establish it as the world's No. 1…

Read More

Coding and Invention Made Fun

By: Special Guest    10/12/2018

SAM is a series of kits that integrates hardware and software with the Internet. Combining wireless building blocks composed of sensors and actors con…

Read More

Facebook Marketplace Now Leverages AI

By: Paula Bernier    10/3/2018

Artificial intelligence is changing the way businesses interact with customers. Facebook's announcement this week is just another example of how this …

Read More