Many questioned Google’s decision to buy struggling Motorola Mobility, a smartphone maker whose last big hit was arguably back in 2010 with the DROID X. But few misunderstood the economic realities of this decision: Although Motorola Mobility will continue as a semi-autonomous subsidiary inside Google’s vast empire, it will do so as a much smaller company. And this weekend, we discovered how Google intends to get there.
Google alerted Motorola Mobility employees on Sunday that 20 percent of the workforce would be laid off. Google will also close 94 Motorola Mobility offices around the world as it abandons unsuccessful markets.
The job cuts amount to about 4,000 positions, two-thirds of which are in the United States.
Google purchased Motorola Mobility for $12.5 billion earlier this year, with the firm’s 17,000 mobile industry patents being the key asset. (Google has been implicitly involved in numerous mobile industry patent lawsuits and other legal battles because it makes the popular Android mobile OS.) But the advertising giant claims it intends to make Motorola successful as a handset maker too.
“We’re excited about the smartphone business,” Motorola CEO Dennis 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.”
Motorola Mobility used to be the Mobile Devices division at Motorola, a once pioneering firm that created the world’s first cell phone back in 1973 and was a leader in semiconductor manufacturing through the end of the 20th century, and in communications devices until recent years. Via a series of spin-offs and corporate splits, Motorola no longer exists, strictly speaking. Of the two remaining pieces, Motorola Mobility is now part of Google and the standalone Motorola Solutions focuses on enterprise and governmental communications products.
As for Motorola Mobility, the formerly high-flying smartphone maker commands only a small piece of the rapidly growing market and its share is on a steady downward trajectory. What the company needs, of course, is another DROID or DROID X-style success story, something that can put it on the map next to successful recent entries from Samsung and HTC, and from Apple, with its annual iPhone love-fest.