HTC Corp (宏達電) yesterday confirmed that it plans to reduce the number of employees on its US team, as the company merges its smartphone and virtual reality (VR) divisions to centralize its organizational structure and resources.
The confirmation came one week after HTC president of smartphone and connected devices Chang Chia-lin (張嘉臨) announced his departure from the company.
“Today [yesterday] we announced a restructuring of the HTC smartphone business in North America ... In doing so, there has been a reduction of some employee positions to realign the business and empower the teams to share more resources,” HTC said in a statement.
The statement came after tech news Web site Digital Trend on Wednesday reported that HTC had laid off a large portion of its employees in the US, leaving only those at HTC Global, one of its US subsidiaries.
“Maybe” 100 employees had been laid off, the report said, citing an anonymous source. HTC did not confirm the number.
When asked by the Taipei Times if the layoff would extend to operations in Europe, North Asia, China and Taiwan, HTC said: “We have nothing else to announce.”
Yuanta Securities Investment Consulting Co (元大投顧) said HTC’s decision to axe personnel in the US was anticipated, given that the company is bringing its smartphone and VR businesses under one leadership in each region.
“HTC’s smartphone business continues to shrink. It is foreseeable that the layoff plan will spread to the company’s operation bases in other regions,” Yuanta analyst Jeff Pu (蒲得宇) said by telephone.
However, the size of the potential layoff would not be dramatic, as HTC has been scaling back its smartphone segments over the past few years, he said.
The company’s employee reduction plan is the right direction, as the company implements restructuring measures and optimizes its resources, he said.
Pu forecast that HTC’s smartphone shipments this year would contract by 22.35 percent to 6.6 million units from last year’s 8.5 million units, while its VR headset shipments would grow 20 percent to 480,000 units from last year’s 400,000 units.
HTC’s revenue is forecast to fall 13.05 percent annually to NT$54 billion (US$1.84 billion) this year, but earnings per share are projected to be NT$32.4, benefiting from the sale of its Pixel smartphone team to Alphabet Inc’s Google, Pu said.
The company’s smartphones ranked fourth with a market share of 9.09 percent in the Taiwanese market last year, falling behind Apple Inc’s 22.95 percent, Samsung Electronics Co’s 20.68 percent and Asustek Computer Inc’s (華碩) 12.7 percent, according to data released by local tech site ePrice.com on Wednesday.
Shares of HTC fell 1.59 percent to NT$62 in Taipei trading yesterday, underperforming the TAIEX, which lost only 0.49 percent.
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