HTC job cuts will be ‘significant’ ahead of projected Q3 losses

7 Aug 20158 Shares

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HTC CEO, founder and chairwoman Cher Wang, pictured at the 2010 World Economic Forum Annual Meeting in Davos, Switzerland

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Taiwanese mobile giant HTC is giant no more, with the company announcing job cuts and other expenditure cuts ahead of a projected share loss five times greater than analysts predicted.

A Q2 loss of NT$5.1bn (€147.47m), and a projected loss of between NT$5.51 (€0.16) and NT$5.85 (€0.17) per share in Q3 is forcing HTC to re-examine spending patterns and product strategy.

In a bid to remain in the smartphone game – the company is being squeezed out at the high end by behemoths Apple and Samsung, and at the low end by low-cost producers like Xiaomi – HTC will cut jobs, discontinue models and make other reductions in expenditure, with cuts likely continuing into Q1 2016.

“The cuts will be across the board. They will be significant,” said HTC CFO Chialin Chang.

In addition to the cuts, a new product strategy will see HTC producing fewer models, and producing them less frequently. The company will focus on profit instead of prolificness.

HTC share prices have already fallen drastically in 2015, with a 51pc decline taking place over Q1 and Q2.

While Chang is optimistic that the company’s fortunes may be reversed through sales of high-end models in emerging markets, such as India, analysts take a different view.

“We believe HTC will keep losing share in the smartphone market and will keep losing money,” said SinoPac Securities’ Calvin Huang in a research note, Reuters reported.

In spite of current difficulties, CEO, founder and chairwoman of HTC Cher Wang has stated that under no circumstances will she consider a merger or buyout, according to Bloomberg Business.

Main image via World Economic Forum/Flickr

Kirsty Tobin served as Careers Editor at Siliconrepublic.com up to August 2017

editorial@siliconrepublic.com