Taipei, July (CNA) Taiwan-based smartphone brand HTC Corp. said Monday that it will lay off 1,500 employees to optimize the company's resources through a "strategic adjustment of its workforce."
The 1,500 employees who will be affected are part of the company's manufacturing operations in Taiwan, and the layoffs are scheduled to be completed by the end of September, HTC said.
According to HTC, it had about 6,450 employees worldwide as of June, meaning that it plans to let go of about a quarter of its entire workforce.
HTC said that to fulfill its social responsibility, the company will try its best to help the affected workers to get through difficult times and will offer them any necessary assistance in finding a new job.
The smartphone brand said it submitted a layoff report to labor authorities in Taoyuan, where HTC is based, and vowed to abide by the law in carrying out the plan.
The announcement echoed a strategic plan released by HTC earlier this year that was focused on streamlining its organization worldwide.
"The layoff announcement was further evidence that HTC remains under pressure from escalating competition in the global smartphone market, where it has lost global share," Xincheng International Investment Consultant analyst Chang Chih-cheng said.
"With its workforce being cut on such a big scale, I don't expect HTC to report any good sales news down the road," Chang said.
In the first five months of 2018, HTC posted NT$13.33 billion (US$437 million) in consolidated sales, down 43.9 percent from a year earlier, though it reported a 16.5 percent month-on-month increase in revenue in May after launching its latest flagship phone the HTC U12+.
The NT$2.45 billion sales in May was also down 46 percent from a year earlier.
In the first quarter, HTC posted a net profit of NT$21.1 billion, compared with a net loss of NT$9.8 billion in the previous quarter, with earnings per share of NT$25.70.
The first quarter results, which ended an 11-quarter losing streak, were boosted, however, by a deal in which the company sold its smartphone ODM assets to Google last year.
Excluding the one-time non-core business gains from the sale, HTC's core business still incurred first quarter operating losses of NT$5.2 billion.
In 2017, HTC incurred a net loss of NT$16.91 billion and a loss per share of NT$20.58, the highest since it listed on the Taiwan Stock Exchange in March 2002.
Under the deal with Google, which was completed in January, about 2,000 HTC engineers who used to work for the ODM assets shifted gears to work for the U.S. company.
(By Jiang Ming-yan and Frances Huang)
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