Motorola Mobility to leave South Korea, cut jobs

The smartphone maker, which was this year acquired by Google, will cut more than 500 jobs and shutter offices in a bid to claw its way back into profitability.

Motorola Mobility will close "most" of its South Korean operations by 2013, according to a leaked internal memo.

According to the memo (in Korean), the move is part of a continued global restructuring effort by parent company Google, which bought the smartphone maker earlier this year for $12.5 billion. Since then, however, restructuring costs have bumped the overall price close to $13 billion.

The deal was proposed by Google to acquire more than 17,000 patents from Motorola, but the hefty price tag will soon be challenged in court, where the search giant may discover that it paid far too much (or caught a bargain) for the company as the court will decide how much the patents are worth.

In the reshuffle, Motorola Mobility will pull out of South Korea all but entirely, shedding more than 500 jobs in the process. Those who will lose their jobs will receive compensatory redundancy packages.

A Motorola Mobility spokesperson confirmed the cuts. In a statement, the spokesperson said:

On December 10, we began communicating to staff in Korea our plans to close most of our operations in Korea, including our research and development and consumer mobile device marketing organization. The changes in Korea reflect our plans to consolidate our global research and development efforts to foster collaboration, and to focus more attention on markets where we are best positioned to compete effectively.

The company also noted that this was a "difficult but necessary decision," and that its home business and iDEN (Integrated Digital Enhanced Network) go-to-market operations will continue to operate in the country.

It follows similar moves by both beleaguered smartphone maker HTC and former Web portal giant Yahoo, which have both pulled out of the South Korean market.

About 10 percent of Motorola Mobility's research and development staff in Korea will be offered relocation packages. It will retain hold of two business units, but the company will no longer offer smartphones in the country or push marketing of existing ones.

Motorola Mobility has already seen around 4,000 employees outside of the U.S. cut and a third of its 90 offices around the world closed in a bid to claw its way back into profitability. The firm also recently shut down all of its international Web sites less than a month ago. 

It's looking more and more likely that the Motorola Mobility purchase was all about the patents, rather than the smartphones, as the company continues to be stripped of everything holding the company in a loss-making financial crisis.

Update at 4:45 p.m. PT: with comment from Motorola Mobility.

This story originally appeared at ZDNet's Between the Lines under the headline "Motorola Mobility to pull out of Korea, more than 500 jobs cut."

 

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