Google Suspend The Chennai Unit of Motorola Mobility
Motorola Mobility, owned by Google, has decided to indefinitely suspend operations at its phone assembling plant in Chennai from February 2013 as part of its global cost reduction plan.
The Chennai facility, which began operations in 2008 with an investment of Rs 172 crore, was a customer fulfilment centre undertaking finishing, packaging and software installation. William Moss, Motorola Mobility’s Director for Communications in Asia Pacific told Business Line that this decision would impact 76 jobs.
“The decision to close down the Chennai facility has been done to streamline the supply chain of the company globally. This means that we are now fulfilling customer orders directly from factories, and we have no current or forecast production requirements that would require the continued use of our Chennai facility,” Moss said adding that the Company’s Research & Development operations in Bangalore and other corporate functions in India will continue.
“We know this is difficult for our colleagues who are impacted, and we are working with them to settle all dues, provide relief packages and to help them find other opportunities,” he said.
This comes a day after Motorola Mobility announced its plans to close down its unit in South Korea eliminating an estimated 500 jobs. The company has also sold its manufacturing facility in China to Flextronics. All of this has happened after Google acquired Motorola’s handset division for $ 12.5 billion in August of 2011.
On August 3, 2012, Motorola Mobility announced that it would reduce its headcount by approximately 4,000 out of a total of about 20,000 employees. Two-thirds of the reduction is set to occur outside of the U.S. In addition, Motorola plans to close or consolidate about one-third of its 90 facilities, as well as simplify its mobile product portfolio-shifting the emphasis from feature phones to more innovative and profitable devices.
“The decision to indefinitely suspend operations at the Chennai facility has been done to streamline the supply chain of the company globally. This means that we are now fulfilling customer orders directly from factories, and we have no current or forecast production requirements that would require the continued use of our Chennai facility,” Moss said adding that the Company’s Research & Development operations in Bangalore and other corporate functions in India will continue.
“Motorola understands how hard these changes will be for the employees concerned and is committed to helping them through this difficult transition. Motorola will be providing generous severance packages, as well as outplacement services to help the employees find new jobs,” it added. Google expects to incur a severance-related charge of no greater than $ 275 million globally.