Google Warns of Further Restructuring at Motorola

Back in August, Google Inc. (NASDAQ: GOOG) said it would cut 4,000 Motorola Mobility workers, or 20% of the workforce, as the company shifted away other handset development in order to focus on making smartphones.

Now Google says planned job cuts at its Motorola Mobility mobile phone unit will cost about $340 million in severance and other costs in the third quarter, and company warned of further restructuring.

The Internet search giant said in a statement:

Motorola has continued to refine its planned restructuring actions and now expects to broaden those actions to include additional geographic regions outside of the U.S. … Motorola continues to evaluate its plans and further restructuring actions may occur, which may cause Google to incur additional restructuring charges, some of which may be significant.

Google has to bring down costs at Motorola if it expects the hardware operation to make money.

Research shows that the only two companies making money in the smartphone industry are Samsung and Apple Inc. (NASDAQ: AAPL). The market share of former contenders such as HTC have begun to erode. Google will need to struggle up a steep incline to avoid what many analysts call a two-horse race.