Daily Management Review

HTC to lay off a quarter of employees


07/02/2018


The manufacturer of smartphones HTC plans to cut about a quarter of the staff at the expense of the production unit in Taiwan. The company is going to do this to optimize costs against the background of the fight against falling sales. HTC has long and deeply mired in losses, and revenue has been falling almost every quarter in a row.



Kārlis Dambrāns via flickr
Kārlis Dambrāns via flickr
HTC said it would cut 1,500 jobs in its production unit in Taiwan. This accounts for about a quarter of the 6,450 employees working for the vendor. The dismissals will be completed by the end of September. Also, as part of the restructuring, the smartphone unit HTC and VR will have one management in each region.

HTC Chairman Cher Wang is confident that the company can return to profit before the end of the year, and to distribute dividends - already in the next. The manufacturer needs new technologies AI, 5G network, blockchain, AR and VR developments to overcome the crisis. 

However, shareholders are skeptical of this statement. Firstly, all these areas are secondary for HTC and do not bring tangible revenue, and secondly, some of them have been present in the business of HTC for a long time, but this has not helped so far. The company clearly needs to drastically revise their smartphone business, but there’s a doubt that it will ever be done. 

The top manager noted that the innovations will allow to give HTC smartphones unique functions that will highlight HTC devices from many similar models.

According to recent reports, HTC's losses amounted to 16.9 billion Taiwan dollars (over $ 552 million), and revenue decreased by more than 20%, to 62.1 billion Taiwan dollars (2.04 billion US dollars).

HTC managed to interrupt a long series of quarterly losses only in the starting quarter of 2018. Sale of part of the business to Google helped the company to return to profits. The deal worth $ 1.1 billion was closed at the end of January 2018.

One of examples of HTC's new smartphone initiatives is the Project Exodus, within the framework of which the company plans to release its first blockchain-based device, HTC Exodus. It is assumed that the device will have improved security features and can be used to extract crypto currency. 

source: digitimes.com






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