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Google's Motorola laying off 20 percent of its workforce as it focuses on a few good phones

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Google's Motorola is cutting its ranks by 20 percent as the company focuses on just a few phone models. Motorola's CEO Dennis Woodside told the New York Times that he wants to make Motorola products cool again.

Motorola logo
Motorola logo

Just months after Google completed its acquisition of Motorola Mobility, major restructuring is resulting in a 20 percent cut (about 4,000 people) of the phone maker's workforce, reports The New York Times. A third of the job cuts are reported to be coming from its US operations, following an earlier reshuffle that saw Motorola lose 40 percent of its vice presidents. As part of the move, Motorola will also be dialing down its operations in Asia and India, as well as its R&D spending in Chicago, Sunnyvale, and Beijing. The shift is designed to refocus Motorola’s product line away from low-end devices, and to concentrate on "a few cellphones instead of dozens," the company’s CEO, Dennis Woodside, told the Times. He went on to say that Motorola wants to re-invigorate its image with things like voice recognition that can determine who is in a room, better cameras, and longer-lasting batteries.

Woodside went on to reiterate Google's commitment to keeping the two companies separate, saying that Google benefits from having many companies making Android devices, and insisting that Motorola will compete fairly for the ability to produce its Nexus branded "pure Android" devices. An unnamed former Motorola executive backed up Woodside's description, saying that the merger has in fact made it more difficult for Google and Motorola to spontaneously collaborate on Android projects.

Update: Google's 8-K filing says that the changes are required for Motorola to achieve "sustainable profitability" after losing money in 14 of its last 16 quarters. Nevertheless, investors should expect to see "significant revenue variability" for several quarters to come. The company also warns of the possibility for additional "significant" restructuring charges in the future, on top of the $275 million in severance-related charges it will largely recognize in the third quarter.