UPDATED 06:15 EDT / AUGUST 13 2012

Motorola Cuts 4,000 Jobs; Shifts Focus to High-End Smartphones

Motorola is to shed some 4,000 jobs worldwide – equivalent to 20% of its workforce – as part of restructuring efforts aimed at restoring the company to profitability.

The mobile phone maker, purchased by internet giant Google just last year, announced that it plans to shut down or merge roughly 30% of its 90 facilities, which include factories and offices.

Google declined to say where the Motorola job cuts would be made, other than to say that two-thirds of the redundancies would be outside of the USA. Google said in a statement that it expects to pay around $275 million in severance packages to those employees who lose their jobs.

According to a company spokesperson:

“Motorola is committed to helping affected employees through this difficult transition, and will be providing generous severance packages, as well as outplacement services to help these people to find new jobs.”

In line with this restructuring, Motorola has also revealed plans to focus on “more innovative and profitable”, high-end smartphones, moving away from low cost products.

The restructuring measures have been announced in response to lingering losses for Motorola, which has failed to make a profit in 14 of the last 16 quarters. The company, which was once one of the top mobile phone manufacturers in the world, has seen a dramatic fall from grace in recent years, losing out to the likes of Apple, Samsung, and to a lesser extent, Sony and HTC.

Samsung is by far and away the most dominant retailer these days, selling 93 million units to command a 25% share of the mobile market in the first quarter of 2012. In comparison, Motorola sold just 9 million phones over the same period, 5.1 million of these being high-end smartphones.

Motorola’s most recent financial results show that the company lost $86 million in the first quarter of this year, $5 million more than the $81 million it lost in Q1 of 2011. 


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