Meizu Technology Corp (魅族), a Chinese smartphone maker backed by Alibaba Group Holding Ltd (阿里巴巴), is planning to cut as much as 5 percent of its roughly 4,000 employees to improve its performance as industry growth cools.
Meizu plans to trim as many as 200 people from its workforce by the middle of next month and is to cap headcount growth to less than 10 percent this year, company spokesman Li Nan (李楠) said yesterday.
Meizu CEO Bai Yongxiang (白永祥) told employees he drew inspiration from a “20-70-10” vitality model espoused by former General Electric Co chairman Jack Welch, intended to root out the bottom 10 percent of performers, Li said.
China’s smartphone market growth is expected to have slowed to the “low single-digits” last year, research firm International Data Corp estimates. That deceleration is affecting a domestic industry crowded with lower-end brands such as OnePlus (一加), Oppo Electronics Corp (歐珀) and Meizu, in which Alibaba bought a minority stake last year for US$590 million to promote its “YunOS” operating system.
Xiaomi Corp (小米), the country’s second-largest vendor, was in danger of missing its target of selling 80 million smartphones last year, people with knowledge of its production plans said in November.
“The mid to low segment of the smartphone market is shrinking,” Yuanta Securities Co (元大證券) Taipei-based analyst Jeff Pu (蒲得宇) said. “Even though Alibaba’s support helps Meizu price itself very competitively, it faces a challenge in hardware profitability.”
Meizu is expected to grow shipments by 25 percent to 25 million smartphones this year, according to estimates by Bloomberg Intelligence, reflecting intensified competition in the low-end smartphone market, where the company mostly competes. That compares with 350 percent growth in unit sales last year, Bai said in a message to employees that Li confirmed.
CAUTIOUS RECOVERY: While the manufacturing sector returned to growth amid the US-China trade truce, firms remain wary as uncertainty clouds the outlook, the CIER said The local manufacturing sector returned to expansion last month, as the official purchasing managers’ index (PMI) rose 2.1 points to 51.0, driven by a temporary easing in US-China trade tensions, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The PMI gauges the health of the manufacturing industry, with readings above 50 indicating expansion and those below 50 signaling contraction. “Firms are not as pessimistic as they were in April, but they remain far from optimistic,” CIER president Lien Hsien-ming (連賢明) said at a news conference. The full impact of US tariff decisions is unlikely to become clear until later this month
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CHIP DUTIES: TSMC said it voiced its concerns to Washington about tariffs, telling the US commerce department that it wants ‘fair treatment’ to protect its competitiveness Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reiterated robust business prospects for this year as strong artificial intelligence (AI) chip demand from Nvidia Corp and other customers would absorb the impacts of US tariffs. “The impact of tariffs would be indirect, as the custom tax is the importers’ responsibility, not the exporters,” TSMC chairman and chief executive officer C.C. Wei (魏哲家) said at the chipmaker’s annual shareholders’ meeting in Hsinchu City. TSMC’s business could be affected if people become reluctant to buy electronics due to inflated prices, Wei said. In addition, the chipmaker has voiced its concern to the US Department of Commerce
STILL LOADED: Last year’s richest person, Quanta Computer Inc chairman Barry Lam, dropped to second place despite an 8 percent increase in his wealth to US$12.6 billion Staff writer, with CNA Daniel Tsai (蔡明忠) and Richard Tsai (蔡明興), the brothers who run Fubon Group (富邦集團), topped the Forbes list of Taiwan’s 50 richest people this year, released on Wednesday in New York. The magazine said that a stronger New Taiwan dollar pushed the combined wealth of Taiwan’s 50 richest people up 13 percent, from US$174 billion to US$197 billion, with 36 of the people on the list seeing their wealth increase. That came as Taiwan’s economy grew 4.6 percent last year, its fastest pace in three years, driven by the strong performance of the semiconductor industry, the magazine said. The Tsai
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