Back in May, Google finalized its $12.5 million acquisition of Motorola Mobility, a smartphone and electronics maker. Now Google is cutting approximately 4,000 jobs at Motorola, 20 percent of the workforce, in an effort to bring the ailing company back into contention with competitors such as Samsung.
In an SEC filing, Google said it would "simplify [Motorola's] mobile product portfolio, shifting the emphasis from feature phones to more innovative and profitable devices." So out go practically antique feature phones, and in comes a focus on a smaller range of Android tablets and smartphones.
"We’re excited about the smartphone business,” Motorola chief executive Dennis Woodside told The New York Times this week. "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 market responded positively to the announcement, as did many analysts. Google is "still learning what makes it a leaner meaner machine. I think as we move into the new year, there maybe more right-sizing," Susquehanna Financial Group analyst Herman Leung said to Reuters. Others weren't so sure.
"It all looks good on paper, of course, but it remains to be seen whether Motorola can really capture consumers' imaginations once again – and sustain it," writes Andrew Nusca of ZDNet. "For most of its corporate existence, Motorola's bread-and-butter was selling to businesses, not consumers. Now that the Mobility group doesn't have communications equipment profits to rely on" – telecommunications manufacturer Motorola Solutions is separate from Motorola Mobility – "there's no safety net. It must rebuild itself into a competitor that's nimble enough to weather neck-snapping changes in technology and taste."