HTC Corp (宏達電) yesterday announced that it would lay off 1,500 employees in its smartphone manufacturing department as part of its restructuring plan.
The job cuts, representing 23 percent of the company’s workforce, which numbered 6,450 at the end of last month, are to be completed by September.
The company is constantly adjusting its manufacturing capacity in response to changing market trends and seasonality to enhance its competitiveness and operating efficiency, it said in a filing with the Taiwan Stock Exchange.
The layoffs are part of the company’s long-term efforts to focus on production innovation, as well as introduce automation and smart manufacturing technologies, the former smartphone titan said.
While the company is shedding a large portion of its local employees in the latest round of layoffs, it would also adjust its migrant workers’ roster, it said.
Market observers said that the move is a continuation of the company’s restructuring that merged its smartphone and virtual reality (VR) divisions under a single chain of command in each region to consolidate and better deploy its resources.
Reducing its workforce is not necessarily a bad thing for the company, as it is trimming costs that are not essential to its transition away from an increasingly saturated smartphone market toward VR and augmented reality (AR), Marbo Securities Consultant Co (萬寶證券投顧) analyst Winson Wang (王榮旭) said.
It would be more worrying if the company were cutting its research and development division, as that would hint at setbacks in its quest to tap new market segments, Wang said, adding that HTC’s VR and AR only need a limited amount of production capacity.
However, market observers have also said that without material growth from VR and AR in the near term to make up for the shortfall in smartphone sales, a lack of orders could diminish HTC’s bargaining power.
HTC said that it is working with its workers’ unions and the Taoyuan City Government to help affected employees and would provide job referral services.
Additional reporting by CNA
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