Google’s downsizing of Motorola continues.
According to a report from the Associated Press, Google will cut another 1,200 jobs from the Motorola division, which it acquired in August, 2011 for $12.4 billion. Google announced in Aug. 2012 in a filing with the Securities and Exchange Commission that it would lay off 4,000 of Motorola’s employees and close a third of its 90 worldwide facilities.
The layoffs are a continuation of Google’s streamlining of Motorola. We noted last week that Google has had two longstanding goals with its struggling smartphone division: clear the rubble and build for the future.
Here is more rubble to clear.
Google has run up $1.1 billion in operating losses with Motorola since the deal was completed in May 2012, according to reports. The only smartphones that the MotoGoo combination have released since the acquisition became final have been three lackluster Droid Razr devices – HD, Maxx HD and M – that fell flat in the holiday shopping season against the likes of Samsung’s Galaxy devices and Apple’s iPhone line.
What Lies Ahead
In 2012, Google began the arduous process of cleaning up Motorola’s supply chain, a bloated and complex environment built up over decades of hardware manufacturing. Google’s plan was to simplify the supply line by using less key components (processors, etc.) by paring back the amount of devices that Motorola made. That included getting out of the feature (dumb) phone business and producing only one distinct series of smartphones. That goal is still in progress, but Motorola has cut back its entries into the market to just the Razr devices.
As mentioned last week, Motorola still has about six months or more of product its pipeline to clear out before it can really focus its attention on creating next-generation smartphones inspired by Google’s software and aesthetics. As such, Google has replaced most of Motorola’s top executives and replaced them with their own hand-picked people such as former DARPA whiz Regina Dugan and former Apple evangelist Guy Kawasaki.
As has been Google’s motto since it was founded, the company is collecting as many top minds as it possibly can and setting them on a task. This time, the task is not creating a better search engine or organizing the world’s information, but rebuilding a once-powerful brand that had become bloated and stagnant. It is a different type of problem for Google. Instead of building from a blank slate, it has to dissemble a mammoth organization while also keeping an eye out for the near term and long term future.
It is hard to tell what type of device will come of the clear-and-build project. Knowing Google and Motorola’s particular strengths, it will likely be very thin, have a long battery life and be extraordinarily intelligent with Motorola’s “smart actions” (introduced with the last round of Razrs) and Google Now baked straight into the Android operating system.
With all of Google’s amassed talent, it is hard not to get kind of excited about the first true release of a MotoGoo phone. But first, Google has to clear away the rubble.