MediaTek Inc (聯發科) yesterday rejected speculation that new co-chief executive officer Rick Tsai (蔡力行) is to trim about 20 percent of overall workforce within a year to accelerate restructuring efforts.
“The rumored elimination of 3,000 jobs is not true,” MediaTek spokesman David Ku (顧大為) said. “The company’s operations are normal.”
Similar speculation arose after MediaTek in March announced the hiring of Tsai, who has been known in the tech industry for job cuts and strict cost management.
He served as CEO of Taiwan Semiconductor Manufacturing Co (台積電) from 2005 to 2009, and chairman of Chunghwa Telecom Co (中華電信) from 2014 to last year.
MediaTek said it would seek legal action against any report that intends to mislead investors and the public about its operations, a company filing with the Taiwan Stock Exchange said.
The Chinese-language Next Magazine reported yesterday that Tsai is to announce a major restructuring program during MediaTek’s annual shareholders’ meeting on Thursday next week.
The program primarily targets downsizing the workforce by 5 percent in four stages, the report said.
That would mean MediaTek would cut more than 3,000 jobs in one year, it said.
The company’s workforce swelled to 16,005 at the end of April from 15,264 in 2015 following four mergers and acquisitions, the company said in its latest annual report.
No significant job reductions occurred after wrapping up the acquisitions in 2015.
“The hiring of Tsai purports to solve the problem of redundancies,” the report said, citing anonymous sources. “It is something that needs to be done.”
Tsai took over on Thursday last week, rather than on July 1 as originally planned, with an aim to speed up MediaTek’s fourth restructuring program as it faces pressure on its margins, the report said.
Gross margin fell to a record low of 33.5 percent last quarter due to increased pricing competition from rivals like US firm Qualcomm Inc and China’s Spreadtrum Communications Co (展訊通信).
MediaTek said in a statement on Thursday last week that Tsai would “directly assume leadership over worldwide sales, technology and engineering research, development, manufacturing operations and information technology.”
MediaTek shares surged 2.86 percent to NT$252 yesterday, shrugging off the speculation about job cuts, compared with the broader market’s 0.04 percent increase.
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