Lite-On announces plans to trim its local workforce by 10 percent

Lite-On Technology Corp (光寶科技), one of Taiwan's biggest computer peripheral equipment makers, said yesterday it planned to trim 10 percent of its local workforce as part of a broader cost-saving program aimed at boosting profit growth.

Lite-On said that about 200 employees, or 10 percent of the 2,000 staffers at the company's local branch, would be laid off or reassigned, marking the biggest workforce adjustment in Lite-On's 30-year history.

"The cost-cutting program will not affect the company's operation. Instead, we hope to save 20 percent in costs," said Elaine Su (蘇怡任), head of Lite-On's public relations division.

She did not give a specific time frame for the project.

Lite-On stressed that its latest cost-cutting program did not include selling its low-margin computer monitor plant.

"We have never considered closing our monitor plant at all. Monitor manufacturing is an important department for us," Su said.

Computer monitor sales made up 40 percent of Lite-On's total revenues of NT$71.41 billion (US$2.17 billion) generated in the first half of the year.

"Besides, we expect to receive lots of orders for next year. We have to fully use our factories to cope with customer demand," Su said, adding that Lite-On supplies liquid-crystal-display (LCD) computer monitors to some of the world's biggest computer vendors.

While Lite-On expressed optimism, weaker demand for LCD monitors is still a real concern for investors, prompting investment researcher CLSA Ltd to lower its investment rating for Lite-On to "underperforming" from "buy" in June.

Lite-On also emphasized that its cost-reduction plan aimed to further boost the company's profit growth in the wake of initial progress made in the area, and not as a result of growing pressure allegedly exerted by rival Innolux Display Corp (群創光電), despite reports published in the Chinese-language Commercial Times yesterday.

"Our focus is profit growth, not revenue expansion," Su said.

Innolux is the LCD manufacturing and computer monitor assembling division of Taiwan's biggest electronic component maker, Hon Hai Precision Industry Co (鴻海精密).

Lite-On said that its profit margin significantly increased to 4.3 percent in the first half of this year, compared to 3 percent a year ago.

Lite-On posted a higher net profit of NT$3.99 billion, or NT$1.51 per share, for the first six months of this year, compared to NT$2.98 billion, or NT$1.21 a share, last year.