Lenovo to slash costs at Motorola as its former CEO jumps ship to Dropbox

Lenovo chief executive Yuanqing Yang has revealed how the company plans to turn around Motorola Mobility, as the smartphone maker’s former chief executive announced he’s accepting a management position at Dropbox.

Late last month, the Chinese PC maker announced it is purchasing the US-based smartphone maker from Google for just $US2.91 billion.

As SmartCompany reported, this was nearly $US10 billion less than the $US12.5 billion Google had originally purchased the smartphone maker for in late 2011.

In a series of interviews with Bloomberg and the Wall Street Journal, Yang has revealed synergies and cost-cutting are central to returning Motorola Mobility to profitability.

“We have already identified areas where we can cut expenses. With the combined scale of Lenovo and Motorola after the acquisition, we can significantly reduce costs in terms of material procurement and supply chain,” Yang told the Wall Street Journal.

“When we complete the acquisition, from day one, we can start working on those cost synergies. Most likely it will take a couple of quarters to turn around the Motorola business.

“We plan to launch more products under the Motorola brand to build a stronger portfolio. We will also re-introduce the Motorola brand in China by taking advantage of Lenovo’s operational resources.”

Yang also believes the Motorola brand will help Lenovo tap new markets.

“Motorola and Lenovo’s mobile businesses are very complementary. When Lenovo tries to enter more mature markets, Motorola’s brand recognition and strong relationships with carriers will help.”

As Yang was discussing Motorola’s future, its chief executive under Google, Dennis Woodside, announced his resignation from the company.

In a statement, Woodside says he’s accepted a position as chief operating officer at cloud storage service Dropbox.

“At the end of March I will step down from my post as CEO at Motorola Mobility to join Dropbox as COO. This was not an easy decision to make, but I leave knowing that Motorola is in great hands – now and in the future.

“In the last 18 months, Motorolans have built two of the company’s best loved phones ever, introduced customisation to the industry, brought unprecedented quality and performance to a value-priced smartphone, and created experiences that changed how people use and interact with their smartphones.”

Woodside says long-time Google employee Jonathan Rosenberg will oversee the transition as the brand’s chief operating officer, while Google chief business officer Nikesh Arora will also remain the executive chairman of the Motorola Operating Board.


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