Nearly a year after Google Inc. (Nasdaq:GOOG) completed its acquisition of Motorola Mobility, the Mountainview, Calif.-based online search behemoth announced it is cutting 1,200 jobs from the cellphone maker.
This brings the total number of redundancies since Google’s May 2012 acquisition to 5,200, or about 26 percent of Motorola Mobility’s workforce at the time of the $12.4 billion purchase.
Google also plans to sell the division’s set-top operations for $2.35 billion, which would spin off about 7,000 additional employees, according to the New York Times. When Google completed its acquisition last year, analysts expected the deal to reflect the company’s desire to get into in-home entertainment services. The sale of Motorola’s set-top business puts into question Google’s strategy in becoming a provider of content-handling gadgets that attach to home entertainment systems.
But as far as mobile phones are concerned, Google’s ownership of Motorola has given it a way to build and sell portable hardware. But it has not been successful in wresting market share from the reigning chaps of smartphone tech: Apple and Samsung Electronics Co., Ltd. (KRX:005935).
The unit generated $1.51 billion in revenue for Google in its fourth quarter ended Dec. 31, but it has registered operating losses of $1.1 billion since the acquisition.
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The purchase of Motorola wasn’t just a way to get Google into selling its own hardware, it also garnered Google over 17,000 patents on mobile technology that helps to shield it from lawsuits by Apple Inc. (Nasdaq:AAPL), which has long said Google’s Android operating system for mobile phones and tablets amounts to intellectual property theft. In the end, this may be the only upside for Google to an otherwise unprofitable job-killing investment.