Google's Motorola Mobility will close its Fort Worth, Texas manufacturing plant by the end of the year.
According to MarketWatch, weak sales and high costs hurt the company's progress to further establish smartphone production in the United States.
The facility opened in May 2013, and employed up to 3,800 people by January 2014. The majority of the additions came from contract manufacturer Flextronics International as part of Motorola's former CEO, Dennis Woodside's initiative to offset critics' beliefs that making phones in the U.S. was too pricey.
Motorola's president said the company experienced difficulty doing business in the United States.
"What we found was that the North American market was exceptionally tough," Rick Osterloh said in an interview.
A Strategy Analytics official said designing phones in the land of the free is easier than making them.
"Manufacturing or assembling smartphones in the U.S. was always going to end in tears for Motorola," Neil Mawston said. "The U.S. is well positioned to design smartphones, as Apple does successfully, but manufacturing them is a whole different ball game."
Motorola opened their plant to rapidly make Moto X phones for U.S. consumers, according to MarketWatch, but the company could not rebound from a decrease in sales. Labor and shipping parts costs were also more expensive than those in international manufacturing facilities.
Other acquisitions and deals have kept Google busy. The company intends to complete a $2.9 billion deal with Lenovo for the Internet search engine's Motorola handset business, according to MarketWatch.
Google announced the deal four months before news of the plant closure surfaced.
The Lenovo sale is not connected to the Fort Worth, Texas plant announcement.
Approximately 700 people are currently employed at the Moto X facility.
The phone measures 4.7 inches with a 1,280 by 720 display with 316 pixels per inch, according to Modern Reader. The device also has a round back and Motorola's signature X8 mobile computing system.
Motorola will keep making the phone in China and Brazil.
