Sat, Nov 06, 2004 - Page 10 News List

Job cuts loom as high-tech firms move to China

CUTTING COSTS A job in the high-tech sector is not as attractive as it used to be since companies started streamlining over concerns of sliding gross margins

By Jackie Lin  /  STAFF REPORTER

High-tech industries are expected to see large-scale personnel cutbacks next year as a result of company mergers and production lines moving to China, a job-tracking and career-consulting firm indicated yesterday.

The formerly popular employment opportunities at notebook computer makers and in the optoelectronics and semiconductor sectors seem to have gradually lost their halos, according to the latest report released by the local monthly magazine Career (就業情報).

Quanta Computer Inc (廣達) and Compal Electronics (仁寶電腦), the world's two largest laptop makers, have streamlined their workforce in the second half of this year over concerns of sliding gross margins and market considerations, the report said.

The two companies announced this week that they plan to move all their production of notebooks and cellphone handsets to China next year.

According to the latest report released by research firm Global Sources last month, Taiwanese notebook computer manufacturers now produce 80 percent of their products in China.

In addition to offering preferential retirement packages, Quanta is also planning to relocate some employees to factories overseas or transfer them to subsidiaries in a bid to cut costs.

Chen Ching-wen (陳清文), head of the Taipei-based market researcher Topology Research Institute (拓墣產業研究所), said that, since high-tech industries will no longer experience explosive growth and China's R&D talents have started coming to the fore, more personnel cutbacks can be expected in mature sectors such as computer-related businesses.

The report also found that mergers among integrated circuit (IC) design companies and makers of TFT-LCD panels and motherboards have likewise led to personnel downsizing. The nation's largest chip design firm, MediaTek Inc (聯發科技), took over the management of its smaller rival ALi Corp (揚智科技) at the end of September, resulting in over 40 ALi employees losing their jobs.

In view of an increasing number of Taiwanese R&D centers and manufacturing bases setting up in China, Chen predicted that rising unemployment from these booming industries would continue.

In stark contrast, traditional industries such as steelmaking, petrochemistry, shipping, pharmaceuticals and textiles, which were considered to be fading over the past few years, are creating well-paid positions blessed by soaring oil and raw materials prices, the report said.

As a result, many companies in the sector are offering munificent bonuses on top of favorable salaries, it said.

Citing China Steel Corp (中鋼) as the best example, the report said the state-run company reported an earnings-per-share (EPS) of NT$4.7 for the first three quarters with the annual pre-tax profits set to top NT$65 billion (US$1.97 billion), compared with last year's NT$39.5 billion.

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