Contract laptop maker Wistron Corp (緯創) plans to reduce its workforce by half within three years amid falling profitability due to slower PC demand, but will adopt industrial automation to ensure it maintains its current level of production, chairman Simon Lin (林憲銘) said yesterday at the company’s annual general meeting.
“The company is undergoing restructuring, and if it’s a kilometer-long tunnel, we are almost out of it as we have reached the 700m to 800m mark,” Lin told shareholders.
Wistron has about 60,000 employees worldwide. The company assembles not only laptops, but desktops, tablets, smartphones, monitors, servers and TVs for brands including Lenovo Group Ltd (聯想), Hewlett-Packard Co and Dell Inc.
Last year, the company’s net profit declined 13.53 percent to NT$5.75 billion (US$191.69 million) from NT$6.65 billion in 2012, with earnings per share (EPS) of NT$2.51.
That was the third straight year Wistron posted a drop in net income since hitting a record high of NT$12.05 billion in 2010.
In the first quarter of the year, net profit hit a nine-year low of NT$340 million, down 63 percent quarter-on-quarter and 78.81 percent year-on-year, with EPS of NT$0.15.
Lin said the worst was over and the company would start posting quarterly growth from this quarter amid recovering demand for PCs following Microsoft Corp’s ending its support for the Windows XP operating system.
“Our first-quarter financial results were disappointing,” Lin said.
“However, we saw the industry started gaining new sales momentum in recent months, and we forecast our third-quarter sales would exceed second-quarter sales,” he said.
The company has been investing in new product research and development since 2011 as it seeks new sales drivers to sustain its profitability, Lin said.
Wistron expects its new photovoltaic module manufacturing and PC product recycling businesses to start yielding profit from the fourth quarter, he said.
Wistron currently handles between 2,000 and 2,500 tonnes of e-waste every month, and aims to increase the volume to between 3,000 and 4,000 tonnes by the end of the year to profit from its new business, he said.
As for photovoltaic modules, Wistron supplies about 1.2 million packs on a monthly basis, Lin said.
The new business is expected to start turning a profit in the fourth quarter, when it will be able to ship more than 2 million packs a month, he added.
Wistron also entered the touchpanel market last year, but the company does not expect positive results until next year or 2016, he said.
Shareholders yesterday approved a proposal to distribute NT$2 in cash dividends this year, which translates into a dividend yield of 7.44 percent based on Wistron’s closing price of NT$26.85 yesterday.