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Taiwan Smartphone Manufacturer HTC to lay off 1,500 Workers

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Taiwan’s stressed smartphone manufacturer HTC said on Tuesday it would slash 1,500 jobs, around a fifth of its total staff, in the biggest staff cull for three years following heavy losses. The notice of the cuts to its manufacturing staff comes despite a new deal with Google, completed in January, which boosted HTC’s first quarter performance after a gloomy 2017. HTC also trying to present different smartphone models according to customer’s demand like Samsung, Apple as well as strong famous Chinese brands such as Huawei.

It suffered a net loss of Tw$16.91 billion ($554 million) in 2017 and a loss per share of Tw$20.58, the highest since it listed on the Taiwan Stock Exchange in March 2002. Losses of Tw$9.8 billion in the last three months of 2017 represented its poorest ever quarterly results. HTC defined the cuts which will be applied by the end of September as a pivotal step in the relocation of resources across the organization that would allow more flexible operations management.

Under the $1.1 billion deal with Google, the US tech giant took on half of HTC’s research and development staff about 2,000 people. Many of them had already been working on its Pixel handset, manufactured by HTC, as well as getting intellectual property licensing.

The deal reproduced Google’s wish to rival the success of Apple iPhones by controlling the hardware as well as the software used in the premium-priced smartphones. Next the Google deal, HTC declared its first quarterly gains for almost three years in May, posting a net profit of Tw$21.1 billion.

But while analysts said the Google agreement would mean some immediate benefits for HTC, such as more capital and cost reductions, they predicted a turnaround in its fortunes was unlikely.

In 2015, the company cut more than 2,000 jobs, slashing its workforce by 15 percent after posting its then biggest ever quarterly loss of Tw$8.0 billion. HTC has previously said it wants to better manage its smartphone and virtual reality businesses.

The company is among major tech firms including Facebook and Samsung to venture into virtual reality and released its first VR headset Vive in 2016. But, analysts have been skeptical about the earning potential of its investments in virtual reality and other emerging areas.

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