Thu, Dec 18, 2008 - Page 12 News List

Local panel makers announce cost-cutting measures

By Lisa Wang  /  STAFF REPORTER

Chi Mei Optoelectronics Corp (奇美電子), the nation’s second-largest flat-panel maker, said yesterday it would eliminate some of its contract employees to cut costs as oversupply and shrinking consumer spending dealt a double-blow to the firm’s bottom line.

The workforce streamlining program came after other cost-saving efforts, including mandatory unpaid leave, were implemented more than a month ago in a sign that the industry-wide slump is worsening and job cuts lurk.

“We will terminate the contracts signed with short-term workers before they are due,” Chi Mei spokesman Denis Chen (陳世賢) said by telephone.

If the projections on customer demand remained vague, Chi Mei could take more drastic steps such as layoffs, but no job or salary cuts were planned at the moment, Chen said.

Chen declined to reveal how many people would be affected by the latest streamlining program. The Chinese-language newspaper the Liberty Times (the Taipei Times’ sister paper) reported that as any as 3,000 contracted workers hired by Chi Mei, or 75 percent of its 4,000 contracted staff, would lose their job in the latest wave of cost-cutting. Chi Mei declined to confirm the report.

Chi Mei employs 17,700 employees in Taiwan. The company posted record-high quarterly losses of NT$4.19 billion for the third quarter, while rival AU Optronics Corp (友達光電) plunged 96 percent year-on-year to NT$860 million in net profits last quarter.

Rather than shedding contract workers, larger rival AU Optronics decided to slash the salaries of high-ranking executives by between 10 percent and 15 percent to brace for the downcycle, said Hsiao Ya-wen (蕭雅文), a public relations official.

To cut costs, AU Optronics decided not to extend contracts with short-term workers as stagnant demand drove factory utilization to 60 percent this quarter. The company would adjust its workforce in accordance with the market situation, Hsiao said.

Suffering the brunt of the trough, Wintek Corp (勝華), the world’s No. 2 maker of mobile phone displays, yesterday said it would slash 10 percent of its total workforce and cut the salaries of senior executives by 30 percent.

Demand for consumer electronics plunged in October because of the financial crisis and there are no signs that the bottom has been reached yet, Wintek said.

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