Money Matters - Simplified

20 percent of workforce slashed in a bid to revamp ailing Motorola Mobility

According to the New York Times reports, Motorola Mobility has told employees it plans to slash 20 percent of its workforce and shut down nearly a third of its offices worldwide.

Google also plans to use the company to better their own Android-powered smartphones and tablets. “We’re excited about the smartphone business,” said Mr. Dennis Woodside, Motorola's new 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.”

The Company:Motorola
The company, started in 1928 in Chicago, unveiled the first commercial cellphone in 1973. By 2004, it looked as if Motorola could again lead the cellphone industry when it introduced the popular Razr.
But Apple and Samsung won consumers’ hearts with the more exciting iPhone and Galaxy phones. Motorola Mobility which split last year from Motorola Solutions, the division that makes devices like police radios lost $233 million in its first six weeks under Google. The phone business has been unprofitable for 14 of the last 16 quarters. The $12.5 billion acquisition, which took place in May, was made partly due to Motorola's impressive 17,000 patent portfolio.

The Revamp plan
The new executive of Motorola plans to slice the number of mobile devices Motorola produces. Woodside feels that developing 'cooler' features on a small number of phones and improving their quality will do more to shore up the ailing company than producing a large number of phones.

Some of the features may include voice-recognition sensors and batteries that last for several days.
Towards this goal, Google has created a group called Advanced Technology and Projects within the company, made of just a few dozen people. Regina Dugan, formerly of DARPA, will be running the scheme.

"Motorola is committed to helping them (the employees) through this difficult transition and will be providing generous severance packages, as well as outplacement services to help people find new jobs," the Google spokeswoman said.