In the last three or four years, businesses in America have had to make tough choices. Some of these choices affected thousands of U.S. workers and continue to affect them today. To start the week off, Google is in the news this morning because of tough choices it had to make concerning Motorola Mobility. Google just announced that they will cut 20% of the company, which means 4,000 Motorola jobs will be lost.
“Return to Profitability”
According to CNet, Google purchased Motorola Mobility “in a $12.5 billion deal that closed earlier this year.” Why make such an expensive acquisition? Well, Google purchased the company to help protect its Android platform. CNet explained, “The acquisition saw Google gain more than 17,000 technology patents.” Basically, if they own the patents, there will be no lawsuits (think Apple vs. Samsung). There are also plans to “cut one-third of [Motorola Mobility’s] around 90 facilities worldwide.”
Whenever a company cuts workers, it’s usually perceived negatively in the eyes of the public. I always hate to read stories like this. But I almost can’t blame Google this time around. Reuters informs that Google, in a report filed with the U.S. Securities and Exchange Commission, said, “These changes are designed to return Motorola’s mobile devices unit to profitability, after it lost money in fourteen of the last sixteen quarters.” That’s almost 4 years of losses—desperate measures were necessary it seems.
Don’t Be Evil
Google, a company with the motto of “Don’t be evil,” might catch some flak for this move. To their credit, Google is planning to spend up to $275 million in “generous severance packages, as well as outplacement services to help people find new jobs.” Plus, it’s not just the regular day-to-day workers that are seeing cuts. “Google has downsized Motorola Mobility’s management, letting go 40% of its vice presidents.” To me, this looks like a relatively fair move (as fair as job cuts can get, at least). $275 million is a hefty sum of money for Motorola Mobility to put towards their workers.
What’s next in Google’s plans for Motorola Mobility? CNet sums it up writing, “The company plans to leave unprofitable markets, stop making low-end devices and focus on a few cell phones instead of dozens.”
The Tough Decisions
Hopefully Google can turn Motorola Mobility around, and some of those people can get their jobs back in the future. It’s not often that we read about workforce cuts from companies as profitable as Google. But, business is business, and it demands profit.
Moves like this are even harder for smaller businesses. As unfortunate as it is, even I’ll concede that sometimes they must be made.
Do you agree with Google’s decision? What steps do you take to avoid layoffs or cuts?
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