Motorola to pull plug on Korean unit in February

Motorola Mobility Korea will close its business in February, including its R&D and consumer mobile device marketing departments, it informed employees on Monday.

The Korean unit of the U.S. company that formerly ranked as one of the world’s most popular handset producers has an estimated 600 employees who will soon be out of work. They will be given compensation proportionate to their time on the payroll.

“The changes in Korea reflect our plans to consolidate our global R&D efforts to foster collaboration, and to focus more attention on markets where we are best positioned to compete effectively,” Motorola Mobility Korea was quoted as saying by Agence France-Presse.

The withdrawal is part of Motorola Mobility’s global restructuring. It was acquired by Google in August last year for $12.5 billion as Google sought to “supercharge the Android ecosystem and enhance competition in mobile computing.”

The deal also included a sizeable portfolio of patents owned by the Motorola unit, which was known as the Mobile Devices division of Motorola until it was spun off as a separate entity in January last year.

The acquisition was followed by a major restructuring that will see about 4,000 jobs at Motorola Mobility scrapped worldwide, about one-fifth of its entire workforce. It will also shut down one-third of its 94 units around the world. Motorola peaked in 2006 with the hugely popular Razr handset, which sold over 200 million units.

Since the Korean unit, established in 1988, is one of the few with both R&D and design centers, speculation was rife that the country could be excluded from the list of restructuring targets. But the shutdown plan may have been affected by the fact that Korea saw no new devices debut this year.

Motorola Mobility unveiled its first smartphone in September but it never hit the Korean market, where Samsung Electronics, Apple and LG Electronics dominate. The new Motorola smartphone is powered by an Intel processor, features a wide screen and is equipped with a longer-life battery in a bid to better compete with the iPhone and Galaxy line-up.

The decision to close its Korean business comes five months after Taiwan’s HTC, another smartphone maker, packed up and left.

By Seo Ji-eun [spring@joongang.co.kr]