HTC to cut 1,500 jobs following heavy losses

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July 4, 2018

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HTC to cut 1,500 jobs following heavy losses

Source: AFP | 00:01 UTC+8 July 4, 2018 |

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TAIWAN’S struggling smartphone maker HTC announced yesterday that it would slash 1,500 jobs, around a fifth of its total workforce, in the biggest staff cull for three years following heavy losses.

The announcement of the cuts to its manufacturing workforce comes despite a new deal with Google, completed in January, which boosted HTC’s first quarter performance after a dismal 2017.

It incurred a net loss of NT$16.91 billion (US$554 million) in 2017 and a loss per share of NT$20.58, the highest since it listed on the Taiwan Stock Exchange in March 2002.

Losses of NT$9.8 billion in the last three months of 2017 represented its worst ever quarterly results.

HTC described the cuts — which will be implemented by the end of September — as “a decisive step in the realignment of resources across the organization” that would allow “more flexible operations management.”

Shares in the firm plunged 6.71 percent to NT$52.80 in Taipei yesterday and are sharply down from a high of NT$1,300 in 2011 as its share of the global smartphone market has been worn away.

Under the US$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 acquiring intellectual property licensing.

The deal reflected Google’s wish to emulate the success of Apple iPhones by controlling the hardware as well as the software used in the premium-priced handsets.

Following the Google deal, HTC announced its first quarterly gains for almost three years in May, posting a net profit of NT$21.1 billion.

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

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HTC to cut 1,500 jobs following heavy losses

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