Google recently announced that it has made a deal with HTC, according to which HTC would be selling off a big chunk of its smartphone division to Google for a total of $1.1 billion (Approximately Rs 7,012 crore). Today, the deal has been closed between both the parties officially.
It means that Google now owns a major chunk of HTC, and soon all the HTC employees under the deal will be joining Google. Interestingly, HTC has kept a small part of the company with them and will continue to function independently including the VR division, communications division and more.
As for HTC, this deal might have come just at the right time, as according to the recent financial reports of the company, they didn’t have a good standing. This cash infusion will help them concentrate more on the divisions which the company executives think will be much more profitable for them. Currently, HTC has been burning almost 75 million USD per quarter, which it was classifying as losses.
This sale will also help the company cut the operational costs, as around 2,000 employees will be moving to Google. These 2,000 employees represent around half of HTC’s R&D team and 20 percent of its total workforce. One really interesting quote has been given by the company, which states that the company will still be competing in the smartphone market, even which the huge staff cut.
For Google, this deal will bring all of the Pixel team (which was currently in HTC) under Google’s roof. This team will be integrated into the hardware group, formed by Motorola CEO Rick Osterloh back in 2016. Now that the entire Pixel team is in-house, it will give Google much more control over how the next Pixel and other devices will turn out.