Google extends Motorola cuts; bumps charges to $340 million in Q3

Google extends Motorola cuts; bumps charges to $340 million in Q3

Summary: The search giant warns in an SEC filing that further restructuring of its mobile making division in the third-quarter will result in charges up by 9 percent than previously thought.

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Google has warned that Motorola Mobility continues to lose money and expects "significant" charges in the third-quarter in additional restructuring costs.

The search giant said it expects to incur further charges 9 percent higher than previously expected -- from $275 million to $300 million -- and warned that it could face an additional $90 million payout in other costs as part of the restructuring effort; though only $40 million will be paid in the third-quarter. 

In a 8-K/A filing with the U.S. Securities and Exchange Commission, Google's chief financial officer Patrick Pichette said:

Motorola has continued to refine its planned restructuring actions and now expects to broaden those actions to include additional geographic regions outside of the U.S.

Google bought Motorola Mobility for $12.5 billion last year as the search giant aimed to bolster its patent portfolio amid continued patent wars with its rivals, notably between Apple and Samsung, as a result of infringing patents found in Google's Android mobile operating system and Samsung's hardware.

But the wholly-owned subsidiary continues to haemorrhage money. Google said it would cut 20 percent of the division's workforce -- approximately 4,000 people -- as the firm attempts to "return to profitability". Google will also close a third of Motorola Mobility's 94 offices worldwide.

Topics: Google, Smartphones, Tech Industry

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4 comments
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  • That hemorrhage will be a full on bleed out once moto has to pay MS

    for every copy of android they've shipped so far. Probably the only bright side of motos shrinking market share. Really too bad, I would have liked to see what moto could have done if they'd opened up and put out a WP8 phone with intel inside.
    Johnny Vegas
    • Errr......

      So does every Android phone make who licensed patents from MIcrosoft. So they are all on equal footing. [At least better than Apple who steals patents....]
      Motorola was just for the patents when Google bought them. Mot Mob was losing money for years. Expect Google to shrink its size dowen to little.
      Gisabun
  • It Was Always About The Patents, Remember

    Remember, the real reason Google bought Motorola Mobility was for its 17,000-strong patent portfolio. Its actual mobile business was never very strong--certainly not strong enough to be a threat to the OEMs who are Google's bread-and-butter in the Android business. Google would never dare to antagonize them by going into competition with them.

    A lesson that Microsoft would do well to learn.
    ldo17
  • Errr.....

    Google seems to be dropping the ball with Motorola. They developed the Android OS but Motorola has announced that some phones from 2011 won't be part of the guarantee of OS upgrades with 18 months of release. They probably lossed a pile already developing the Chome OS, an OS that nobody [outside of techies] want.

    [BTW, to the author: Look at the first paragraph. Shouldn't it be something like: "Google has warned that Motorola Mobility could continue to lose money...."]
    Gisabun