Motorola Mobility Changes Tactics, Axes 4,000 Jobs

The new management wants to make fewer, better smartphones

Google-owned Motorola Mobility has announced it will lay off 4,000 employees, or 20 percent of its workforce, as part of restructuring measures designed to make the company profitable again. It will also shut down a third of its offices, the majority in Asia and India.

Motorola plans to leave unprofitable markets, decrease the number of devices it manufactures and focus on a few hi-end smartphones, an approach which has been pioneered by Apple and adopted by its competitors Samsung and HTC.

The walking papers

Google completed its £8 billion acquisition of Motorola Mobility in May. The deal gave the search giant an opportunity to expand into hardware, and armed it with over 17,000 patents.

“Motorola is a great American tech company that has driven the mobile revolution, with a track record of over 80 years of innovation, including the creation of the first cell phone. And as a company who made a big, early bet on Android, Motorola has become an incredibly valuable partner to Google,” said Google CEO Larry Page in a blog post following the acquisition.

Three months on, and Google is taking decisive measures to get the failing company back on track. Despite the transition to Android, Motorola’s phone business has been unprofitable for 14 of the last 16 quarters.

According to New York Times, as a result of the changes Motorola Mobility will focus on manufacturing just a few quality devices, instead of 27 it launched last year. At the heart of the development process will be the new department of Advanced Technology and Projects, led by Regina Dugan, who previously worked for US Defense Advanced Research Projects Agency (DARPA).

“We’re excited about the smartphone business,” Motorola CEO Denis Woodside told the New York Times. “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 said it will take care of the terminated employees, “providing generous severance packages, as well as outplacement services to help people find new jobs.”

According to market researcher IDC, Android has emerged as the most popular operating system on smartphones, with 68.1 percent of the global market share in the second quarter of the year, while iOS claimed a 16.9 percent share.

However, this popularity and the open nature of the platform have caused an explosive growth of malware. Finnish security firm F-Secure found 5033 malicious Android application files in the second quarter of 2012, representing a 64 percent increase. It also found 19 new malware families and 21 fresh variants of existing Android malware.

“Android malware is on the rise because simply because there are more opportunities out there to exploit. As the Android OS market share continues to surpass Apple’s, the criminals have more devices to target and a higher chance of success,” said Sean Sullivan, security advisor at F-Secure.

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