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Google to cut 4,000 Motorola jobs
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E-mail CNTV, August 15, 2012
Motorola has announced cuts of 4000 jobs around the world. After Google bought Motorola Mobility last year, analysts are expecting this strategic move and cost cutting to have a positive impact on the smartphone market in China.
On the 13th of August, Motorola publicized the decision on its official Micro-blog webpage that it is, quote: "reducing its headcount by approximately 4,000. Two-thirds of the reduction is set to occur outside of the U.S.. …Motorola expects this strategy to create new opportunities and help return its mobile devices unit to profitability…" In addition, they are going to close one third of the global offices, and to take 275 million US dollars of charges because of it.
This is the largest jobs cut ever in Motorola's history after Google bought the money losing cellphone maker for 12.5 billion US dollars in 2011 - the largest acquisition in Google's history. The announcement sent Google's shares up nearly 3 percent. Peking University's finance Professor Liu Qiao says it's not a surprise to see this result, the jobs cut has sent clear signals to the market that Google is starting to consolidate the mobile phone business in Motorola.
Finance Professor Liu Qiao of Peking University said, "first, google wants to use M's patent to reduce the risk on the android system, second, google wants to use M as a platform to expand its business beyong software, they want to get into the smart phone and software business, I think after the transaction eventually approved by the government, google started to consolidate its business, I think this move has been expected by the market."
By pairing Motorola's smartphone hardware business with its Android software, Google may have a better chance of mounting a direct challenge to Apple's iPhone. Analyst believes that positive effects will ripple through the industry.
Chen Jian, Telecom Chief Analyst of Research Dept., CITI Securities Co., Ltd, said, "The most impacted sector is mobile manufacturers. It will raise the competition among the mid and high-end manufacturers, but it will benefit the low-end ones. The android manufacturing link will feel the effects too. It is possible that the Android operating system will split into several parts in the near future.
Google's aim is to return Motorola mobility to profitability. This commercial mobile pioneer team will surely bring more personal communication products in the coming future.
