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.
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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.
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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.
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