htconephoto05100032138orig500
Handheld Devices

HTC to cut work force by 15 percent, amid struggling smartphone sales

Struggling HTC is cutting 15 percent of its work force in an attempt to cut costs and revive its ailing smartphone business.

The Taiwanese company announced the lay offs on Thursday, after its second quarter earnings took a dive, for a NT$8 billion (US$257 million) loss.

HTC declined to mention the exact number of layoffs. But as of March 31, the company had 15,685 employees, according to its most recent annual report. This means a 15 percent reduction could end up cutting 2,300 jobs.

HTC is taking the measures to streamline its operations, in an effort to produce profitable growth. As part of the change, the company is forming new business units that will focus on three key areas, premium smartphones, virtual reality and connected lifestyle products.

The restructuring will trim the company's operating expenses by 35 percent, HTC added.

Once a major smartphone vendor, the Taiwanese company has fallen on hard times. Its market share has dwindled over the years, and its latest flagship phone, the HTC One, has failed to generate much-needed sales.

Competition from a number of Chinese rivals, including Xiaomi, has dampened HTC's chances of making a comeback, according to analysts. The smartphone market is simply saturated with too many choices for consumers, making it hard for HTC to gain visibility.

On Thursday, however, HTC's CEO Cher Wang said in a statement that the company was moving to "diversify beyond smartphones."

The company is developing a virtual reality headset, the Vive, slated to launch later this year. It's also working in partnership with sport apparel maker Under Armor on a fitness wearable.

HTC hopes these upcoming products will generate meaningful revenue, but doesn't expect this to happen until next year.

PREVIOUS ARTICLE

« Yahoo spinoff brings an end to a pioneering era

NEXT ARTICLE

Microsoft confirms Windows RT won't get new universal apps »
author_image
IDG News Service

The IDG News Service is the world's leading daily source of global IT news, commentary and editorial resources. The News Service distributes content to IDG's more than 300 IT publications in more than 60 countries.

  • Mail

Recommended for You

Trump hits partial pause on Huawei ban, but 5G concerns persist

Phil Muncaster reports on China and beyond

FinancialForce profits from PSA investment

Martin Veitch's inside track on today’s tech trends

Future-proofing the Middle East

Keri Allan looks at the latest trends and technologies

Poll

Do you think your smartphone is making you a workaholic?