Motorola Mobility workers still fear layoffs

By Anna Marie Kukec
Published In Daily Herald
January 31, 2014

Will Motorola Mobility workers face more layoffs once new owner Lenovo closes its $2.91 billion deal?

Workers in Libertyville and Chicago aren’t holding their collective breath, said a recruiterand a former Motorola Mobility manager.

China-based Lenovo has a history of laying off at its own company and after it acquired IBM’s PC business in 2005. Yet, its top executives said Wednesday and again Thursday that the company actually plans to grow Motorola Mobility.

“There are no plans to lay off,” Lenovo spokesman Brion Tingler said Thursday. “We bought them for its team and their abilities to make really great mobile phone products. We plan to grow it.”

Still, those promises are falling on a whipsawed group of survivors who witnessed tens of thousands of layoffs at former parent company Motorola Inc. and then thousands more after Motorola Mobility spun off from the mother ship. Lenovo said Motorola Mobility now has about 3,500 workers worldwide but wouldn’t provide Chicago-area numbers. Compare that to the 17,428 workers Mobility had in September 2012, according to a Google filing.

Lenovo follows California-based Google Inc.’s acquisition of Mobility for about $12.5 billion. Google barely warmed the seats in Libertyville in 2012 before 3,000 were shown the door. That group included a local manager with 27 years of experience.

“A guy who never met us called each of us from California and told us over the phone that we were laid off,” said the manager, who wished to remain anonymous because he is now employed elsewhere.

He said former colleagues who are still employed at Mobility have been on a roller coaster in recent years from layoffs, acquisitions and a move from Libertyville to downtown Chicago. The relocation of Mobility’s headquarters is underway and could be completed by the time the Lenovo transaction closes.

“I’ve talked to some current employees and they’re told that it’s going to be the status quo. But they’re just apprehensive now,” the former manager said.

He said an article in the China Daily leaked the Motorola Mobility-Lenovo deal, which led Google to call a hasty town-hall meeting late Wednesday to formally tell its workforce. Google also used the opportunity to reinforce Lenovo’s commitment to the handset business and its entry into the American market to help grow the business.

Scott Sargis, president of Strategic Search Corp., a Chicago recruitment firm that places workers and executives worldwide, said Lenovo laid off thousands from IBM after its acquisition. Sargis said he’s now hearing from Motorola Mobility workers who anticipate the possibility of more cuts.

“Current and former employees are telling me they’re afraid there will be more layoffs,” Sargis said.

Still, Lenovo said it’s actually been growing its businesses.

“Since acquiring IBM’s PC and laptop business in 2005, Lenovo has increased its employee population in North Carolina by a third since the economic downturn, taking advantage of a highly educated, highly skilled and highly motivated local workforce,” said Milanka Muecke, director of North America PR & Communications for Lenovo in Morrisville, N.C.

Muecke also said Lenovo opened a U.S. personal computer production line in Whitsett, N.C., near Greensboro. The new facility has created about 120 new manufacturing jobs and builds Think-branded notebook and desktop PCs, tablets, engineering workstations and servers for sale to domestic businesses, government and education customers, as well as consumers.

“Lenovo is the first major PC maker in the last 10 years to build PCs in the United States, just 60 miles away from Research Triangle Park in North Carolina,” Muecke said. “Lenovo has a strong track record of successfully achieving the quality, scale, execution and global footprint required to deliver long-term, profitable growth, while maintaining and growing employment.”

The shrinking workforce at Mobility has affected its original tax incentive deal with Illinois. Mobility hasn’t applied for or received EDGE credits after the second quarter of last year, said Mobility spokesman Will Moss.

The tax incentive package, which was provided in 2011 to keep Mobility’s workforce in Illinois, can be transferred to the new owners, said Dave Roeder, spokesman for the Illinois Department of Commerce and Economic Opportunity.

“However, note that Motorola Mobility is ineligible to collect its tax credit because it has fallen below the jobs guarantee of 2,500 that it made with the state,” Roeder said. “Motorola Mobility claimed $11.63 million in credits in FY2011 and $11.01 million in FY2012, but it has been ineligible to get any more since then.”

While the workforce waits in the wings, the sale needs regulatory approvals in the United States and other countries before it can be finalized, said wireless analyst Jeff Kagan, an independent analyst based in Atlanta.

“Do I think Motorola will have layoffs? That’s the million-dollar question,” Kagan said. “No one knows yet. Not even Lenovo. Not in the beginning, anyway. They will first strategize and develop a plan. Then they will look at workers.”