Google warns of more Motorola cuts, revises up third quarter bill

Thu Oct 4, 2012 1:45pm EDT
 
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By Alexei Oreskovic

(Reuters) - Google Inc raised its estimate of the cost of job cuts at its money-losing Motorola Mobility unit in the third quarter and warned of "significant" additional charges from further restructuring.

Severance-related charges at its mobile phone unit will be 9 percent higher at $300 million, Google said, adding the bill may rise another $40 million in the quarter after the exit of facilities and markets.

"Motorola has continued to refine its planned restructuring actions and now expects to broaden those actions to include additional geographic regions outside of the U.S.," the company said in a statement.

Google's broader plan for the money-losing cellphone maker remained unclear.

A spokeswoman said the company was not announcing additional job cuts.

Shares of Google were up 0.7 percent at $767.65 in midday trading Thursday, at a record high.

Google acquired Motorola in May for $12.5 billion to bolster its patent portfolio as its Android mobile operating system competes with rivals such as Apple Inc and Samsung Electronics Co Ltd.

But many investors and analysts have questioned Google's need to be in the hardware business, where profit margins are lower and Google has little experience.   Continued...

 
Google Chairman Eric Schmidt speaks at a Motorola phone launch event in New York, September 5, 2012. REUTERS/Brendan McDermid