When Lenovo acquired Motorola Mobility in 2014, the two units became the third largest smartphone manufacturer in the world. Today, Lenovo officially hands the mobile device reins over to Motorola Mobility.
As part of a restructuring that will see Lenovo reduce staff by up to 5%, Lenovo’s mobile unit will be folded into Motorola Mobile, according to a statement made by Lenovo Mobile Group President Chen Xudong to reporters.
This means Lenovo will cede the design and production of all mobile devices to the Motorola Mobility subsidiary.
Why the transition?
Just a few months ago it seemed as if Lenovo and Motorola were set to launch a slew of news devices together. Lenovo Chairman Yang Yuanqing said at the time that consumers “may see” the company unveil “very exciting products, including phones and watches" this summer.
But Lenovo, which is planning to cut about 3,200 jobs from its global workforce after the company witnessed a 51% net profit decrease during the first quarter of 2015, is planning to reduce overhead by better focusing its divisions.
At the time of its quarterly report, Lenovo blamed "severe challenges in its main markets" as a major contributing factor to the decline. It also said it would be completely restructuring its mobile division to leverage the strengths of Motorola.
As Lenovo explained, Motorola would take over responsibility for the design, development and manufacturing of smartphones. Today’s move indicates Motorola will also take control of mobile device staffing, as well.
Rick Osterloh, President and COO of Motorola Mobility, will run the division. The company will still use both the Lenovo and Motorola Mobility brand names.
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