DailyTech - Motorola Mobility Expects to Pay $31 Million as a Result of 800 Job Cuts

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Gadgets Motorola Mobility Expects to Pay $31 Million as a Result of 800 Job Cuts
Virginia Lee (Blog) - October 31, 2011 10:29 AM

11 comment(s) - last by wallijonn.. on Nov 1 at 1:02 PM

(Source: funwidmasti.com)

The pretax costs are $27 million in severance and $4 million for closing facilities

Back in August of this year, Google announced that it had acquired Motorola Mobility, an American company that makes devices such as Droid smartphones and the 10.1" Xoom tablet, for $12.5 billion. Now, Motorola Mobility expects to pay $31 million in costs due to job cuts as it prepares for the Google acquisition.

The acquisition looks great for Google. This move allows the tech giant to get its hands on over 17,000 patents to protect Android, and also provides a path into the hardware business.

Just last week, all was looking well for Motorola Mobility as well as it announced favorable financial results that beat analysts' predictions. Motorola Mobility reported an 11 percent increase in sales to $3.26 billion, and managed to narrow its loss to $32 million from $34 million one year before.

Now, Motorola Mobility has announced expects to pay $31 million to cut 800 jobs. The pretax costs are $27 million in severance and $4 million for closing facilities.

These costs were reported in a regulatory filing with the U.S. Securities and Exchange Commission. According to Motorola Mobility, the moves were approved October 24, and the costs will be recorded this quarter.

Source: Business Week

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Pretty generous severance...

By quiksilvr on 10/31/2011 10:59:11 AM , Rating: 2

That's on average nearly $34,000 per employee. More than enough to hold them over while they search for new jobs (or get hired into different Motorola positions within the company).

Not much news here. Pretty textbook procedure here.

RE: Pretty generous severance...

By MeesterNid on 10/31/11, Rating: -1

RE: Pretty generous severance...

By bupkus on 10/31/2011 11:11:42 AM , Rating: 2

So you imagine an SEC hypothetical just so you can spew your political theory?

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RE: Pretty generous severance...

By MeesterNid on 10/31/2011 1:03:39 PM , Rating: 3

There is a marked difference between extrapolating probable outcome based on past events and "imagining hypothetical(s)". And the same can be said for the contrast between a response that could perhaps have some merit vs one that is simply defecated out of one's void cranium.

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RE: Pretty generous severance...

By FITCamaro on 10/31/2011 11:13:41 AM , Rating: 1

Businesses are in business to make money and stay profitable for their shareholders. Who are people.

With any large merger like this there's always going to be job losses due to redundant jobs. You don't need two people doing the same thing.

Don't act like this is corporations sticking it to the man.

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RE: Pretty generous severance...

By FlyBri on 10/31/2011 5:10:05 PM , Rating: 3

@FITCamaro Look, I'm not going to get into whether or not this specific layoff is ultimately a good decision or not, but while you're right that businesses are in business to make money and stay profitable for their shareholders (people), you have a simplified view of everything.

First off, who are the majority shareholders in many corporations? Many times it's executives and other higher-ups who are directly related to the business. Also, businesses aren't just worried about their shareholders, but also their stakeholders (any person with interest or concern in the business, i.e. strategic partners, etc. who don't necessarily have to own any stock).

And while "trimming the fat" during mergers is typical of companies, it isn't always the best long-term plan. In the short term, sure, it may add to their bottom line, but in a lot of cases it's not the best long-term plan, and just a quick and easy fix for the short term.

Sometimes companies are too worried about shareholders due to stock price, making sure they can give a dividend, etc., rather than the operations of their business. As a result, their stock price may stabilize in the short-term, but long-term it will eventually suffer because their core business degrades. Hate to use the example, but Apple doesn't give out dividends because it rather use the money for building the business, which makes them worry less about appeasing shareholders and more focused on growing the business.

So, in some instances people have the right to feel that corporations are screwing over their employees. Finally, I know what you were getting at obviously, but just wanted to let you know that you used the phrase "sticking it to The Man" incorrectly. It's used when people who don't have power resist against people who hold power. So actually the corporations would be "The Man" in your example, not the employees.

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RE: Pretty generous severance...

By kmmatney on 10/31/2011 2:24:41 PM , Rating: 2

I don't know exactly how things workk, but I would think if you get another job in a different division of Motorola, you wouldn't get the severence pay as well...

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RE: Pretty generous severance...

By drycrust3 on 10/31/2011 5:10:09 PM , Rating: 2

quote:
More than enough to hold them over while they search for new jobs

The problem being that while at Motorola they could well have been in a responsible position and paid very well for it, but if, after a year of no luck in getting a similar job elsewhere, they could easily opt for a low paid job. This means the government gets less taxes, it means a family has to rethink all its economic expectations, it means someone else who needed that low paid job is still without work.

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cutting products

By AlvinCool on 10/31/2011 12:20:01 PM , Rating: 2

Usually I hate it when this happens but not this time. Google is cutting products and the jobs that went with them. Motorola mobility wasn't profitable and Google doesn't want the dead weight. They bought the company for the android products and that is all the plan to keep. I would think they will be expanding that division in the near future.