Wed, Jul 17, 2019 - Page 11 News List

Yageo denies reports of layoffs

FALLING PRICES:Yageo said that amid the continuing trade dispute between China and the US, the global passive components market remains haunted by uncertainty

Staff writer, with CNA

One of Yageo’s two factories in Kaohsiung is pictured yesterday after reports appeared alleging that the firm plans to lay off 360 employees.

Photo: Chang Hui-wen, Taipei Times

Yageo Corp (國巨), a leading passive components maker, yesterday denied reports that the company is laying off about 360 employees at a plant in Kaohsiung amid deteriorating global market conditions.

Yageo, which produces chip resistors, inductors and multilayer ceramic capacitors (MLCC), said it always carries out measures to optimize its operations, but added that all layoffs are based on performance and any workforce reduction is based on provisions in the Labor Standards Act (勞動基準法).

Yageo did not disclose the number of employees it has laid off.

Local media reported that the layoffs affected some executives, including the deputy head of the Kaohsiung plant, one of two the company runs in the city.

The denial prompted investors to buy Yageo shares throughout the trading session yesterday, pushing the price up 0.75 percent to NT$269.5 at the close on the Taiwan Stock Exchange.

So far this year, the shares have fallen 15.52 percent, compared with a 11.91 percent rise in the benchmark TAIEX over the same period.

Kaohsiung Labor Affairs Bureau Chief Secretary Pi Chung-mou (皮忠謀) said that there have been some departures of employees at the plant, including resignations, but added that the bureau is unaware of a large layoff of workers.

The bureau has not received any complaints from Yageo employees about being laid off, but the bureau would stay alert over the employment conditions at Yageo’s plants in the city, Pi said.

Yageo has about 3,000 employees at its two plants in Kaohsiung, local media reported.

Analysts said that an MLCC price decline has been confined to 10 percent, indicating that the market conditions show some signs of stabilizing.

However, Yageo needs to make efforts to maintain its sales in the third quarter at the level seen in the second quarter, analysts said.

In the second quarter Yageo posted NT$9.58 billion (US$308.6 million) in consolidated sales, down 15.9 percent quarter-on-quarter and 50.2 percent year-on-year due to falling product prices.

In the first six months of this year, Yageo’s consolidated sales fell 30.7 percent year-on-year to NT$20.97 billion.

Yageo said that amid the continuing trade dispute between the US and China, the global passive components market remains haunted by uncertainty, so the company is staying cautious about its business outlook for the second half of the year.

Taiwan provides about 30 percent of Yageo’s total production.

The company is keeping its high-end technology in the local market and plans to build a new plant in Kaohsiung.

The new plant is expected to cost the company about NT$16.5 billion and construction is scheduled to be completed in two to three years.

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