Technology

Job Cuts to Cost Motorola Mobility $31 Million


(Bloomberg) — Motorola Mobility Holdings Inc., the mobile-phone maker that agreed to be bought by Google Inc., expects to incur $31 million in costs as it cuts 800 jobs, according to a regulatory filing.

The pretax costs include $27 million in severance and $4 million for closing facilities and will be recorded this quarter, Libertyville, Illinois-based Motorola Mobility said yesterday in a regulatory filing with the U.S. Securities and Exchange Commission. The moves were approved Oct. 24, the company said.

Motorola Mobility is reining in costs as it prepares to complete its acquisition by Mountain View, California-based Google Inc. The $12.5 billion deal was announced Aug. 15.

“Motorola Mobility continues to focus on improving its financial performance by taking actions to manage the company’s costs,” Jennifer Weyrauch-Erickson, a spokeswoman for Motorola Mobility, said in a statement. She said the efforts are unrelated to the proposed acquisition.

On Oct. 27, Motorola Mobility announced financial results that beat analyst estimates as sales climbed 11 percent to $3.26 billion. The company is still losing money, though its loss narrowed to $32 million, or 11¢ a share, from a loss of $34 million a year earlier.

Google is buying Motorola Mobility to gain access to mobile patents and move into the hardware business. Chief Executive Officer Larry Page said the company would use Motorola Mobility’s more than 17,000 patents to protect Android supporters in licensing and legal disputes with rivals such as Apple Inc. and Microsoft Corp.

Motorola Mobility shareholders will vote on the acquisition Nov. 17.

With assistance from Hugo Miller in Toronto

Olga_kharif1
Kharif is a reporter for Bloomberg News and Bloomberg Businessweek in Portland, Ore.

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