Motorola Mobility is cutting 500 positions, or 25 percent of its workforce in Chicago, as part of a major restructuring by its parent, China's Lenovo Group.
That's more than twice the 10 percent reduction Lenovo said it was undertaking in its non-manufacturing workforce.
The company employs a little under 2,000 people at the Merchandise Mart, where it moved last year from its longtime headquarters in Libertyville.
"We will maintain a substantial employee base there, as well as our labs and design facilities," spokesman Will Moss said.
Employees were being told of their fate today.
The dismissals are part of a major restructuring at Lenovo, which reported a sharp slowdown in sales in the most recent quarter. Motorola also saw a steep dropoff, with its phone shipments dropping 31 percent from a year ago.
“It's across all functions, affecting all departments,” Moss said.
Chicago is Motorola Mobility's largest facility by headcount. Motorola had about 3,500 people worldwide when Lenovo bought it from Google last year for $2.9 billion.
"Chicago is not as badly impacted as some of our other sites," Moss said, though he declined to detail headcount reductions at other sites.
In announcing a restructuring after disappointing quarterly results last night, Lenovo said it would be relying more heavily on Motorola “to design, develop and manufacture smartphone products.”
With Motorola cutting its headcount by 25 percent, it begs the question whether it will need all of the 600,000 square feet of space it has on four floors of the Merchandise Mart, which has become one of the most desirable office locations in the city. Food giant ConAgra is looking to take 200,000 square feet in the building.
"There's nothing specific we can announce," Moss said. "The Merchandise Mart continues to be our headquarters and will still be the hub for global R&D and home for our labs. We'll continue to be there."
There are specialized labs on three of the four floors, but if Motorola did decide to vacate some of its space, it wouldn't be hard to fill. “As long as any space that Moto would potentially consider subleasing isn't too specialized, I would expect the market to snap it up,” said Jack Keenan, a managing director at JLL.
Food giant ConAgra is looking to take 200,000 square feet in the building.
Motorola's move, announced in 2012, helped cement the Mart as the city's most visible address for high tech and to spur activity in River North. Since then, it's added tenants such as Braintree and Yelp.
“The Mart continues to thrive as a tech hub,” said Howard Tullman, CEO of 1871, a tech incubator at the Mart. “I don't think it's going to impact things a whole lot.”
Much of Motorola's staff are engineers and technical workers, who likely will be snatched up quickly in a very tight labor market for tech talent. Experienced sales and marketing workers who understand tech also are in high demand.
But the cutbacks further diminish Motorola's presence in Chicago.
When Motorola Mobility spun off from the rest of the company, four years ago, it produced cell phones and set-top boxes and had $11.5 billion in sales and 19,000 employees worldwide. Google bought it a year later for $12.5 billion. About 7,000 employees worked in the set-top box unit, which was sold to Arris in 2012 for $2.4 billion.
Motorola had about 3,500 people worldwide when Lenovo bought it from Google last year for $2.9 billion. The company did not say what Motorola Mobility's total headcount will be when the layoffs are complete.
The firings at Motorola follow the elimination of 700 jobs at Kraft Foods' headquarters in Northfield yesterday, and recent layoffs at such other big Chicago employers as CME Group, McDonald's, Walgreens Boots Alliance and Allstate.
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