With the Motorola Mobility acquisition tucked away in Google’s pocket, changes that should help Motorola regain its foothold in the mobile industry are starting to take place. The New York Times is reporting that Motorola will start by trimming its global workforce by 20 percent, resulting in the termination of nearly 4,000 employees. The cutback will allow Motorola to shut down one-third of its offices in Asia and India while reducing R&D in Beijing, Sunnyvale and Chicago. According to the company’s CEO, Dennis Woodside, this dramatic move will allow Motorola to focus on “a few cellphones instead of dozens.”
We have a right to compete in this market and I think we've got to prove why we're going to build and bring devices to people that are worth talking about again.Gary BriggsMotorola
The new company strategy will turn Motorola’s focus away from entry-level phones, which have very little profit margin, to high-end devices with longer-lasting batteries, improved cameras and new voice recognition software. These changes will be accompanied by new ads that will be more in touch with Google’s brand identity, portraying a simple and emotional message to consumers.
After posting losses for 14 of its last 16 quarters, it’s clear that Motorola is trying its best to reinvent itself as a means to achieve profitability. The dramatic workforce reduction is expected to cost $275 million in severance-related charges in Q3, but we expect to see a newly invigorated Motorola by early next year.