25 July 2018
Taiwan based HTC plans to lay-off 1500 employees in order to optimize its resources. The employees will be cut from its Taiwan manufacturing facility. The process is scheduled to be completed by September end.
HTC has approximately 6,450 employees worldwide as of June, which means that the company is laying off about a quarter of its entire workforce. The company stated that it plans to help the affected works and will assist them in finding new jobs. The move is a part of the company’s plan to streamline its organization worldwide, as it sees a decline in smartphone sales. The company has been facing tough times over the past few years, with profit declining considerably amid increased competition from rivals.
HTC posted NT$13.33 billion (US$437 million) consolidated sales which accounted for a decline of 43.9% from a year earlier. It reported a 16.5% month-on-month increase in revenue in May, post the launch of its flagship model the HTC U12+. The company’s sales were down to NT$2.45 billion in May, a 46% decline from a year earlier.
The company posted positive results in the first quarter, after 11 consecutive loss-making quarters, after it sold its smartphone ODM assets to Google last year. As a part of the agreement, 2,000 HTC engineers who worked with ODM assets, will now work with Google.
"The layoff announcement was further evidence that HTC remains under pressure from escalating competition in the global smartphone market, where it has lost global share," Xincheng International Investment Consultant analyst Chang Chih-cheng said.
"With its workforce being cut on such a big scale, I don't expect HTC to report any good sales news down the road," Chang said.
I see it as a positive to see the home employees being laid off. It'd be more feasible to find a job in a home nation than anywhere in foreign market.
The positive is that HTC will assist these 1500 people to get a new job.
What's worth noticing is that the workforce is being reduced from the home country. Not from elsewhere.
Laying off workforce is yet another way of managing a company's resources if, for example, something like sales becomes a problem.