Motorola Mobility Expects to Pay $31 Million as a Result of 800 Job Cuts
October 31, 2011 10:29 AM
comment(s) - last by
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
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.
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RE: Pretty generous severance...
10/31/2011 5:10:05 PM
@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.
"Spreading the rumors, it's very easy because the people who write about Apple want that story, and you can claim its credible because you spoke to someone at Apple." -- Investment guru Jim Cramer
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