Google swings axe at Motorola

The 20,000 employees of Motorola Mobility, the smartphone maker, got a taste of life under their new owner, Google, yesterday, when they were told that one in five of them would lose their jobs.

One third of the company's offices will close, as Google's chief executive Larry Page struggles to streamline the manufacturing business he bought for $12.5bn (£8bn) this year.

Google promised "generous" redundancy packages for laid-off workers and warned investors to expect a restructuring charge of at least $275m. The shake-up is necessary, Google said, because Motorola has lost money in 14 of the past 16 quarters.

The Asian operations are expected to bear the brunt of the cuts. In the UK, the company employs 250 people across three sites.

The aim is for Motorola to focus on fewer products, get out of unprofitable markets and to work more closely with the team behind Google's smartphone operating system Android, in the hope of creating new phones that will quickly rival Apple's iPhone and Samsung's Galaxy range.

Motorola would be asserting its "right to compete" in the smartphone market after years of disappointing sales, Gary Briggs, head of consumer marketing, told The New York Times.