Motorola Mobility's layoff of 700 workers in Illinois will make it ineligible for the state's Economic Development for a Growing Economy tax credit, according to a report from the local Daily Herald newspaper.
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The company had agreed in May 2011 to a contract with the state, stipulating that it would maintain 2,500 jobs in Illinois and invest $600 million in R&D and capital improvements, in exchange for $110 million in tax credits over 10 years, the paper said.
Sandra Jones, a spokeswoman for the Illinois Department of Commerce, said that the state still expects to recoup its investment in Google and Motorola.
"While we are disappointed Google is laying off workers as part of a global reorganization in the wake of its acquisition of Motorola, we are heartened that a growing technology company like Google is putting roots in Illinois. We expect that Google's decision to make Chicago one of only three global hubs of innovation -- along with Beijing and Silicon Valley -- will draw more technology investment to the state," she told the newspaper, adding that Motorola could reapply for the EDGE tax credit if it boosted employment above the 2,500-worker threshold.
The 700 layoffs in Illinois are part of a broader 4,000-job cut at Motorola Mobility that Google announced in a recent regulatory filing. While some say the search giant was merely interested in bolstering its mobile patent portfolio in an increasingly cutthroat legal landscape, Google itself asserts that the idea is simply to refocus Motorola's resources on the more profitable high end of the mobile marketplace and away from the smaller-margin feature phone market.
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This story, "Report: Motorola Mobility set to lose Illinois state subsidies over layoffs" was originally published by Network World.