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Motorola Mobility to spend $31 million to cut 800 jobs

October 31, 2011 | 10:21 am

Motorola Photon 4G on Sprint

Motorola Mobility Holdings Inc., the half of Motorola that Google Inc. wants to buy, is going to cut 800 jobs and will spend about $31 million to do so, the company said in a regulatory filing.

The layoffs, which Motorola says will ultimately be a cost-cutting move, will include about $27 million to be paid out in severance and an additional $4 million will go toward costs associated with closing down facilities where those employees worked.

Motorola Mobility announced the layoffs, which were approved by the company Oct. 24 and will take place before the end of the year, in its third-quarter filing with the Securities and Exchange Commission. 

The employees who will lose their jobs are employees of Motorola Mobility, but they also worked on projects from Motorola's other half, Motorola Solutions, which focuses more on products for business customers, the filing said.

Motorola Mobility is the slice of the company that designs and builds consumer products -- such as the Photon, the Droid Bionic and the upcoming Droid Razr smartphones.

In its filing, Motorola Mobility said that it generated a $215 million operating loss through the first nine months of 2011. Through the first three quarters of 2010, the company had an operating loss of $148 million.

"Handset unit shipments in the first nine months of 2011 were 31.2 million units, a 20% increase compared to shipments of 26.0 million units in the first nine months of 2010," Motorola said in its filing. "Smartphone shipments in the first nine months of 2011 were 13.3 million, a 52% increase compared to shipments of 8.8 million smartphones in the first nine months of 2010. In addition to handsets, we also shipped nearly 800 thousand media tablet units in the first nine months of 2011."

Media tablets would be referring to the Motorola Xoom tablets, the company's challenger to Apple's iPad which hasn't been a hot seller. Motorola's phones and tablets run Google's Android Honeycomb operating system.

In August, Google agreed to buy Motorola Mobility for $12.5 billion in a move that will not only land the tech giant a hardware company, but also allow it to tap into the thousands of patents Motorola owns.

A Motorola Mobility shareholders vote on the Google deal will take place on Nov. 17 and Google is also awaiting regulatory approval. The boards of both companies have approved the takeover deal.


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-- Nathan Olivarez-Giles

Photo: The Motorola Photon 4G smartphone from Sprint. Credit: Armand Emamdjomeh/Los Angeles Times