Google has confirmed plans to cut about 4,000 jobs from its Motorola Mobility subsidiary, representing about 20 percent of the unit's 20,000-employee headcount.
Google, which closed its $12.5 billion acquisition of Motorola Mobility in May, disclosed the cuts in a Form 8-K filed with the U.S. Securities and Exchange Commission. Google indicated that two-thirds of the reduction would occur outside of the U.S. and also said that the Motorola unit will close or consolidate some 90 facilities, "as well as simplify its mobile product portfolio -- shifting the emphasis from feature phones to more innovative and profitable devices."
"These changes are designed to return Motorola's mobile devices unit to profitability, after it lost money in fourteen of the last sixteen quarters," wrote Google in the filing. "That said, investors should expect to see significant revenue variability for Motorola for several quarters. While lower expenses are likely to lag the immediate negative impact to revenue, Google sees these actions as a key step for Motorola to achieve sustainable profitability."
[Related: Google Closes Motorola Mobility Deal]
Google said it will take a severance-related charge of up to $275 million, largely recognized in the third quarter.
Google first announced the acquisition in August 2011, about eight months after Motorola split into two companies: Motorola Mobility, which housed Motorola's set-top boxes, cable equipment and home business as well as its handsets and mobile devices, and Motorola Solutions -- where much of the former Motorola's channel business resides -- for networking and enterprise mobility products.
At the time, the deal was portrayed as a way for Google to fortify its patent portfolio and protect its Android operating system from competitors. Google hasn't said much about how it plans to continue with Motorola Mobility's hardware businesses, though the filing language around "feature phones" suggests Motorola's lower-end handsets will be phased out.
Following the acquisition's close three months ago, speculation over layoffs began immediately. Google has made several executive changes to the unit already, and at the time of the acquisition it named Dennis Woodside, former president of Google, Americas, to succeed Sanjay Jha as the unit's CEO.
The sluggish economy has meant a number of recent layoffs in high-profile tech companies. Nokia, for example, said in February it would axe 4,000 jobs across three of its manufacturing sites, and Cisco in July confirmed another round of about 1,300 positions following last year's sizable restructuring.
HP is another vendor making broad cuts, having confirmed plans in late May to lay-off 27,000 employees, or 8 percent of its workforce.
Published Aug. 13, 2012