Motorola Mobility cuts 4,000 staff worldwide to return to profitability

Motorola Mobility is to cut 4,000 staff worldwide as part of efforts to return to profitability.

The job losses are the equivalent of 20% of its workforce.

The firm, bought by Google last year, said it planned to close or merge about one third of its 90 facilities which include offices and factories.

US-based Motorola also announced a shift in emphasis away from low-cost non-smartphones to “more innovative and profitable devices”.

Two-thirds of the jobs will go outside of the US, Google said. It expects the cost of severance packages to be $275 million.

“Motorola is committed to helping them through this difficult transition and will be providing generous severance packages, as well as outplacement services to help people find new jobs,” a statement said.

Motorola has lost money in 14 of the past 16 quarters, Google said.

The company, which once dominated the mobile phone market, has fallen behind its competitors, including Apple and Samsung.

According to one industry watcher, Strategy Analytics, Samsung overtook Nokia as the world’s biggest seller of mobile phones earlier this year.

Samsung sold more than 93 million handsets in the first three months of 2012, giving it a 25% market share. By contrast, Motorola said it had sold almost 9 million mobile devices over the same period, including 5.1 million smartphones.

Its most recent financial results showed that Motorola Mobility recorded a loss of $86 million in the first quarter of the year. That was greater than the $81m net loss it made in the same period a year earlier.

Google bought Motorola Mobility last year in a $12.5 billion deal, giving it access to more than 17,000 technology patents.