Shares of Google Inc(NASDAQ:GOOG) rose 2.65% to $659.12 in the mid day session on Monday and outperforming the broader market. Moreover, the stock is now trading at new 8-month high with just less than 2% away from its 52-week high of $670.25.
Internet search giant Google said on Monday it would laying off about 4,000 people at its Motorola Mobility unit and consolidate about a third of its 90 locations.
Can GOOG Hit New 52-week High This Week? Get Free Trend Analysis
In a filing with the Securities and Exchange Commission Google said that the changes were intended to make the unit profitable, but warned that investors should expect revenue to fluctuate over the next few quarters, and sales to drop before the cost savings took effect.
The job cuts accounted for about 20 percent of Motorola Mobility's 20,000-strng workforce and seven percent of Google's overall employee-base. About two-thirds of the job cuts will take place outside the United States, the company said.
Google bought the Motorola unit earlier this year for $12.5 billion chiefly to get access to the patents and drive its own path in the mobile market.
Motorola, which was once the global leader in mobile handsets, has been struggling of late and has not been able to keep pace with the innovations of Apple, Samsung and Google. The last well-known product it made was the Moto Razr and that was in 2005.
Motorola had made a desperate attempt to hang in there by getting into the manufacture of smartphones but that only slowed the decline and could not stem it altogether. In the first quarter of this year Motorola sold 5.1 million smartphones. The company has made losses in 14 of the last 16 quarters.
How can Investors Make Profit Now, Find Out Here
Google is expected to make severance payments worth $275 million to the employees who will be laid off which will be recognised in the current quarter itself.