MOUNTAIN VIEW, Calif. -- Google said Monday that it will cut about 4,000 jobs at its Motorola Mobility wireless phone business and will close or consolidate about one-third of Motorola's 90 locations.
The reductions represent about 20 percent of Motorola Mobility's 20,000 employees, and two-third of the job cuts will take place outside of the U. S. The company said Monday that Motorola Mobility has lost money in 14 of the past 16 quarters.
Google (
GOOG) said the changes are intended to make the unit profitable, but warned that investors should expect the business' revenue to fluctuate over the next few quarters.
"While lower expenses are likely to lag the immediate negative impact to revenue, Google sees these actions as a key step for Motorola to achieve sustainable profitability," the company said in a filing with the Securities and Exchange Commission.
Google said it also will shift Motorola Mobility's focus from simple wireless phones to more profitable devices.
The restructuring will cost Google about $275 million in severance costs, which will largely be recognized during the third quarter. The company also expects to book an unspecified amount in restructuring charges, mostly in the third quarter.
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User data across more than 60 of Google's services is <a href="http://www.dailyfinance.com/2012/03/29/want-to-protect-your-online-privacy-too-late/">now integrated</a>, including Search, Gmail, Google Docs, Google Calendar, YouTube, and Google+. The company claims the benefits of this change include:</p><br/ >
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Increased clarity in privacy policies through consolidation of product-specific privacy policies for each service</p><br/ >
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Ability to do "cool things" like "provide reminders that you're going to be late for a meeting based on your location, your calendar and an understanding of what the traffic is like that day."</p><br/ >
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Perhaps, but Google's refusal to let customers opt out makes the user-focused spin questionable.</p>
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Google was recently granted a patent for "Advertising Based on Environmental Conditions," which allows smartphones to gather information about the user based on sounds, light, temperature, and air composition and use that information to deliver customized advertisements. According to the official patent application, with this technology, "advertisements for air conditioners can be sent to users located at regions having temperatures above a first threshold, while advertisements for winter overcoats can be sent to users located at regions having temperatures below a second threshold."<br />
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As yet, it's unclear if Google has any plans for using this technology, but its increasing interest in data mining suggests that it will take more than privacy concerns to stop it.</p>
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Along with WPP (<a href="http://www.dailyfinance.com/quote/nasdaq/wpp-group-plc-adr/wppgy">WPPGY</a>), Gannett (<a href="http://www.dailyfinance.com/quote/nyse/gannett-co-inc/gci">GCI</a>), and others, Google recently garnered criticism for exploiting a loophole in Apple's (<a href="http://www.dailyfinance.com/quote/nasdaq/apple/aapl">AAPL</a>) Safari Web browser to track the activities of users who intended to block such attempts. Google responded by saying, "We used known Safari functionality to provide features that signed-in Google users had enabled."<br />
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Safari is designed to block most tracking, but allows websites to track users who submit a form. Google used this functionality to make Safari think users submitted forms to Google, even when they didn't.</p>
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Last year, Google announced its decision to shut down Google Labs -- the source of some of the company's most popular innovations, including Gmail, Google Maps, Google Docs, and Google Reader.</p>
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These innovations not only created excitement for users, they also created enthusiasm among employees as they explored new ideas without feeling pressured to produce predetermined outputs.<br />
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Google still allows engineers to spend 20% of their time pursuing projects they are passionate about. But it has delivered not-so-subtle clues that innovations related to Google+ and other data-mining projects are more valued. For example, 25% of employee bonuses in 2011 were tied to the success of Google+.</p>
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Google's extensive data-collection practices also put its users at risk of identity theft. As evidenced by the recent security breach against Global Payments (<a href="http://www.dailyfinance.com/quote/nyse/global-payments-inc/gpn">GPN</a>), which affected MasterCard (<a href="http://www.dailyfinance.com/quote/nyse/mastercard-inc/ma">MA</a>), Visa (<a href="http://www.dailyfinance.com/quote/nyse/visa-inc/v">V</a>), American Express (<a href="http://www.dailyfinance.com/quote/nyse/american-express-company/axp">AXP</a>), and Discover Financial Services (<a href="http://www.dailyfinance.com/quote/nyse/discover-financial-services/dfs">DFS</a>), among others, phishing tactics have become so sophisticated that they can find success in mining data from the most technologically advanced companies.<br />
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The mere collection of such detailed data -- especially when Google integrates data about its users from so many different sources into one data set -- can put users at risk by creating an appealing target for phishing scandals.<br />
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While Google's new strategy may promote the company's bottom line in the short-term, company leaders seem to forget that Google grew its customer base by offering cool services, respecting its users, and attracting top-notch employees who are passionate about innovation.</p>
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Mountain View, Calif.-based Google completed its $12.5 billion purchase of Motorola Mobility in May. The deal, the most expensive in the company's history, expanded it into the hardware business and pushed it deeper into the cellphone business, a market it entered four years before with the debut of its Android software.
The cellphone pioneer had struggled in the years leading up to the deal. It hadn't produced a mass-market hit since it introduced the Razr cellphone in 2005 and its market share has fallen.
Google shares rose $7.20 to $649.20 in premarket trading.
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