PCCW Ltd, Hong Kong's biggest phone company, has asked more than 2,000 workers to take a pay cut of as much as 20 percent as it moves them into a new network company to reduce costs.
Workers who don't accept the terms may be fired on Dec. 20, said Chan Wing Wa, the unit's managing director.
The affected workers represent about three-quarters of the 3,000 staff that PCCW plans to shift into Cascade Ltd, a new technical services unit.
The phone company, controlled by Richard Li, son of billionaire Li Ka-shing (李嘉誠), is trying to cut costs because its core fixed-line revenue is falling and it needs cash to pare US$4.2 billion in net debt.
"It's a good move to repair the company's financial position," said Ambrose Chang, who helps manage US$400 million of stock at Daiwa International Capital Management Asia.
"The company is feeding a huge workforce while facing difficulty in finding growth in its local market," Chang said.
PCCW shares fell as much as 3.7 percent. They traded at HK$1.32, down HK$0.03, or 2.2 percent, as of 12:29 p.m.
The phone company said the average salary cut will be "approximately 10 percent" and it will reimburse workers for the lost pay in the first year, with payments in January and September.
"There will be no alternative redeployment opportunities within PCCW for employees who choose not to accept the offer to join Cascade," the company said in a statement.
The plan for Cascade comes less than a month after PCCW turned 11 percent of its workers into subcontractors, reducing its workforce to 12,000 from 13,500. Unlike those workers, the staff who move to Cascade will remain part of PCCW.
The phone company has in addition fired about 1,858 employees since July 2001. Sales at its fixed-line phone business fell 9 percent in the first half of this year on increased competition and weak demand caused by Hong Kong's economic slump.
A "small number" of workers will be fired as a result of the creation of Cascade, Chan said, without elaborating.
"We won't accept any firing, and any salary cut will be opposed," said Leung Ting To, chairman of the PCCW employees' general union.
The union hasn't yet held a meeting of its members to discuss their response, he said.
PCCW expects the salary cut to reduce its own costs by 10 percent, Leung said, citing Chan.
Demand for artificial intelligence (AI) chips should spur growth for the semiconductor industry over the next few years, the CEO of a major supplier to Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) said, dismissing concerns that investors had misjudged the pace and extent of spending on AI. While the global chip market has grown about 8 percent annually over the past 20 years, AI semiconductors should grow at a much higher rate going forward, Scientech Corp (辛耘) chief executive officer Hsu Ming-chi (許明琪) told Bloomberg Television. “This booming of the AI industry has just begun,” Hsu said. “For the most prominent
Former Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) chairman Mark Liu (劉德音) yesterday warned against the tendency to label stakeholders as either “pro-China” or “pro-US,” calling such rigid thinking a “trap” that could impede policy discussions. Liu, an adviser to the Cabinet’s Economic Development Committee, made the comments in his keynote speech at the committee’s first advisers’ meeting. Speaking in front of Premier Cho Jung-tai (卓榮泰), National Development Council (NDC) Minister Paul Liu (劉鏡清) and other officials, Liu urged the public to be wary of falling into the “trap” of categorizing people involved in discussions into either the “pro-China” or “pro-US” camp. Liu,
Minister of Economic Affairs J.W. Kuo (郭智輝) yesterday said Taiwan’s government plans to set up a business service company in Kyushu, Japan, to help Taiwanese companies operating there. “The company will follow the one-stop service model similar to the science parks we have in Taiwan,” Kuo said. “As each prefecture is providing different conditions, we will establish a new company providing services and helping Taiwanese companies swiftly settle in Japan.” Kuo did not specify the exact location of the planned company but said it would not be in Kumamoto, the Kyushu prefecture in which Taiwan Semiconductor Manufacturing Company (TSMC, 台積電) has a
China has threatened severe economic retaliation against Japan if Tokyo further restricts sales and servicing of chipmaking equipment to Chinese firms, complicating US-led efforts to cut the world’s second-largest economy off from advanced technology. Senior Chinese officials have repeatedly outlined that position in recent meetings with their Japanese counterparts, people familiar with the matter said. Toyota Motor Corp privately told officials in Tokyo that one specific fear in Japan is that Beijing could react to new semiconductor controls by cutting the country’s access to critical minerals essential for automotive production, the people said, declining to be named discussing private affairs. Toyota is among
RSS