On Monday, Google and Motorola Mobility had confirmed that most of its operations in South Korea will be shut down next year, as part of the parent company’s continuous global reorganizing move after being acquired for $12.5 billion.
Among the operations that the company will close are the research and development, and the consumer mobile device marketing organization. The decision will affect five hundred workers who will lose their jobs, but will be compensated and set to receive redundancy packages.
The company has already started communicating with the personnel in South Korea for the downsizing plan. Though, it is no longer a surprise due to Google’s official announcement made last August.
According to reports, only ten percent of staff for research and development will be left in the company, in which relocation packages will be offered. However, its consumer mobile device marketing and R&D will be affected as the company will no longer be selling its mobile devices in the country.
Motorola said in its email that it was such a tough decision but still requires to be done. It also added that the company will concentrate more on the markets where it can effectively compete.
According to Google, the cuts are designed for Motorola to attain sustainable revenue on its mobile devices unit after it acquired negative revenue in the 14 of the last 16 quarters.
Though most of the operations will be closed, the Integrated Digital Enhanced Network (iDEN) and its home business will still continue the operations in the states. One-third of Motorola Mobility’s 90 offices worldwide are already closed down where 4,000 workers outside the U.S. will be sent home jobless.
All international websites of Motorola have already been shut down by Google. The company aims to simplify its Motorola’s patent portfolio, making more innovative and profitable gadgets than feature phones.
Motorola Mobility is not only the company to withdraw in South Korea. Its rival mobile maker HTC recently closed its offices in the country as well. In October this year, Yahoo also announced its plan exit from South Korea by the end of the year. However, there were no details disclosed as to why exactly it is leaving the country.
The company also announced recently that it has signed an agreement with a Singapore-based company, Flextronics, to whom it will hand over its operations in China and the management of its base in Brazil. There will be more bases that will be shut down and more employees to be left jobless soon as Google tries to stir the company back into profitability.