Motorola Mobility To Cut 20 Percent Of Its Workforce Worldwide
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UPDATED 08/13/12 – 4:52 p.m.
MOUNTAIN VIEW, Calif. (CBS) — As many as 4,000 employees around the world are about to lose their jobs with Illinois-based Motorola Mobility.
As WBBM Newsradio’s Regine Schlesinger reports, last year, Google bought the Libertyville-based company for $12.5 billion.
Now, in its first step to reinvent the struggling cell phone manufacturer, Google is cutting 20 percent of its worldwide workforce, and closing a third of its offices worldwide.
The New York Times reports research and development for Motorola Mobility will be centered in Chicago, California and Beijing.
LISTEN: WBBM Newsradio’s Regine Schlesinger reports
About a third of the jobs set to be eliminated are in the United States. City Hall says that figure includes 750 jobs at Chicago area facilities.
CBS 2 Chief Correspondent Jay Levine reports the bad news about Motorola’s layoffs in the Chicago area was offset, at least partly, by United Airlines’ announcement it was moving its corporate headquarters to the Willis Tower, in a lease that will keep the airline in Chicago through at least 2028.
“While we expect this strategy to create new opportunities and help return Motorola’s mobile devices unit to profitability, we understand how hard these changes will be for the employees concerned,” a Motorola spokesperson said.
The layoffs could also be hard on Motorola, which could lose part of the $110 million in tax breaks and job training funds promised by Gov. Pat Quinn in return for keeping at least 2,500 jobs in Illinois.
Chicagoland Chamber of Commerce president Gerald Roper said, “I think it’s just a restructuring, and then building from there. … We’re getting fewer people, perhaps today or through next year, but long-term this is really a building process for Motorola.”
Roper said he also expects, with Motorola Mobility moving to downtown Chicago, other companies that do business with Motorola could eventually bring more jobs to the city.
Motorola’s restructuring strategy includes focusing their efforts and employees in three places: Chicago, Beijing, and Sunnyvale, Calif. – where Google is located.
The plan would centralize operations, and Google hopes the strategy will stem the bleeding both on the bottom line, and from its workforce.
Just eight years ago, Motorola was a leader in the industry with its popular Razr phone. But since then, it has lost market share to competitors such as Apple and Samsung.
(TM and © Copyright 2012 CBS Radio Inc. and its relevant subsidiaries. CBS Radio and EYE Logo TM and Copyright 2012 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed. The Associated Press contributed to this report.)