HTC to cut 2,500 jobs following huge Q2 losses

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Manufacturer refused to rule out cuts to UK jobs as part of 35 per cent cost cutting exercise

HTC has refused to rule out UK job losses after announcing plans to cut 2,500 roles as part of a “business realignment”.

The cuts are part of a wider global cost cutting exercise that the Taiwanese manufacturer said will see it reduce operating expenditure by 35 per cent.

HTC has 16,746 employees worldwide according to its investor relations website and said it expected headcount to be reduced by up to 15 per cent as it attempts to streamline operations after announcing heavy Q2 losses of £163 million last month.

Cher-WangIn a statement, the manufacturer said it would establish “new business units” to focus on premium smartphones, virtual reality technology and connected products.

HTC refused to comment on whether the job cuts would affect UK roles, or disclose how many people the manufacturer employs here.

HTC CEO Cher Wang (pictured) said: “As we diversify beyond smartphones, we need a flexible and dynamic organization to ensure we can take advantage of all of the opportunities in the connected lifestyle space.

“This strategic realignment of our business will ensure that each product group has the right focus, the right resources and the right expertise to win new markets.”

Future bleak after M9 flops

HTC has seen its revenues plummet by almost 50 per cent to £672 million for the three months ending June 30.

It has already announced plans to cut its product lines to focus on the high end of the market after disappointing take-up of the HTC One M9, which launched at Mobile World Congress in March.

M9_PerLeft_Silver_010315_EMEAThe manufacturer also provided a bleak outlook for Q3, forecasting revenue to more than halve to between NT$19-22 billion (£387 million-£448 million).

Last month, several industry analysts raised questions about HTC’s future in the smartphone business after it announced forecasts for Q2.

According to the latest figures from Kantar Worldpanel ComTech, HTC accounted for five per cent of UK smartphone sales in the three months ending May 31 – down from seven per cent from last year.

Figures from IDC show HTC accounted for 1.5 per cent of the global smartphone market in Q1, although this was up marginally from the same quarter in Q1 2014.

At the time, CCS Insight chief of research Ben Wood said: “These are extremely troubled times for HTC. The warning signs have been there for a long time and you have to question whether HTC has a viable future in smartphones.

“Some of its rivals are hanging in there but you only have to look at HTC’s results to see they have had a desperate quarter.”

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