HTC to Cut 15% Staff After Being in Deficit for Two Quarters

HTC to Cut 15% Staff After Being in Deficit for Two Quarters
Photo Credit: Reuters/達志影像

What you need to know

Due to being in deficit for two consecutive seasons, HTC announced the reducing of operating costs by 35% and is expecting to scale down 15% employees worldwide.

At the HTC shareholders meeting on June 2, Chairperson Cher Wang, along with other chief officers, apologized to the company’s shareholders for HTC’s stock price officially falling below NT$ 100 (approximately US$ 3.18).

On August 13, due to being in deficit for two consecutive seasons, HTC announced the implementation of the HTC Era Program. The company will reduce operating costs by 35% and is expecting to scale down 15% employees worldwide.

After losing NT$ 9.7 per share in the second quarter, HTC estimates it will lose NT$5.51 to NT$ 5.89 (approximately US$ 0.18 to US$ 0.19) per share in the third quarter. The total loss of the first three quarters add up to NT$ 15 (approximately US$ 0.48) per share and is equal to 1.5 capital stock. Though HTC refuses to release the figures of smart phone shipments and market shares, foreign institutional investors estimate the company only sold 5,400,000 smart phones in the second quarter this year, which is around 20 percent less than the 6,800,000 of the same quarter last year.

UDN reports, Cory McNutt, reporter of technology website Android Headlines, asks if the rise and fall of HTC reflect the difficulties small and medium manufactures have to face? Or is it just a result of bad management and refusal to embrace innovation?

Perhaps there isn’t an answer.

McNutt analyzes that everyone can see the effort HTC put into One M7, but there were no other changes after it. Two year later, HTC introduced M9, which was nothing special, so market shares declined from 20 percent to two percent.

Wang points out, the HTC Era Program includes three dimensions: continuous growth, unity and cooperation, and lean optimization. HTC will adjust the organization, allocate resources properly, focus on innovation and adapt efficiency. It will also assess internal procedures strategically and reduce costs.

CNA reports, Cher Wang says in a letter to the staff, “I clearly understand any adjustments during the company’s transition will cause concerns. Therefore, I sincerely appreciate your understanding and patience during these difficult times. I am confident that HTC will thrive again because we have a clear strategy, outstanding innovation skills and a dynamic organization. Implementing the HTC Era Program will definitely take us back to leading the global market.”

Translated by June and Olivia Yang
Edited by Olivia Yang

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