Motorola Mobility will cut roughly 800 jobs globally by year's end as the pending acquisition by Google inches closer, the company has revealed.
In an SEC filing made late last week, Motorola Mobility said the company approved the "workforce reduction" on October 24. Cutting 800 jobs will cost Motorola Mobility roughly $31 million in severance and facility exit costs, the company said in the filing.
"On October 24, 2011, Company management approved a workforce reduction action under which the Company will record a net pre-tax charge to earnings during the quarter ended December 31, 2011, of approximately $31 million, comprised of $27 million of severance costs related to approximately 800 employees impacted by the action and approximately $4 million of facility exit costs," the company wrote. "Both of the Company's business segments (the Mobile Devices business and the Home business), as well as various corporate functions, are impacted by the action and the action affects employees globally. Under the Company's employee severance plan, policies or applicable law, severance payments to employees affected by this action will be made substantially over the next 12 months."
Motorola split into two companies in January, spinning off Motorola Solutions and Motorola Mobility.
The announced job cuts come on the heels of a Motorola Mobility's third quarter earnings last Thursday, which showed an 11 percent revenue jump to $3.26 billion from the third quarter one year ago, but reflected a loss of $32 million. In the third quarter, the company's mobile devices revenue hit $2.4 billion, up 20 percent compared to the year-ago quarter, yet the operating loss was $41 million. Meanwhile, Motorola Mobility's home segment revenue was down 10 percent to $825 million.
Overall, Motorola Mobility said it shipped 11.6 million devices, including 4.8 million smartphones and approximately 100,000 Motorola XOOM tablets in the third quarter, compared to 9.1 million mobile devices and 3.8 million smartphones shipped in the third quarter last year.
The job cuts and pending facility closures come just weeks before Motorola Mobility shareholders plan to vote on the $12.5 billion acquisition from Google. The Google buy, which was announced in August, has received praise from Google channel partners, who expect it to give Google a mobile device hardware arm to advance its Google Android mobile operating system. Motorola has already hitched its wagon to Android and has been exclusively making devices or the open source platform. Motorola Mobility has said it expects the Google merger to close in late 2011 or early 2012. Motorola Mobility stockholders will vote on the Google merger in a special meeting set for November 17.
In September, the U.S. Department of Justice requested additional information on the proposed Google-Motorola Mobility merger to examine the deal for possible antitrust issues.