HTC to cut 15% of workforce, targets 35% lower costs

An HTC spokeswoman would not specify how many people would be laid off, but said the global headcount was 15,000, which would put the job losses at around 2,250.

The company said it aims to reduce operating costs, which came in at NT$40.1 billion (€1.1 billion) in 2014, by 35%.

Cher Wang, chairman and CEO of HTC, said: “The operation plan will define a specific goal of each business units with appropriate resources and expertise, to win over new market”. Given the recent poor financial news, pending workforce cuts, and the company’s stated focused on the connected lifestyle, I would not be surprised if HTC left the smartphone business behind in a year or two. But with that market still nascent, HTC will still need to release a series of impressive smartphones in order to stay buoyant.

HTC’s latest restructuring comes after it gauge a week ago a net loss for the third quarter on weak sales and sluggish demand in China.

Once the biggest smartphone vendor in the US, HTC’s share price has plummeted 20% this week, taking its market value below cash on hand.

It was aiming for “significant profitable growth with a leaner and more agile operating model”, the company said. The layoffs followed Lenovo’s announcement that its profit was down 51 percent year-over-year in the second quarter to $105 million. HTC sells its own smartphones and also makes handsets for a number of leading US companies, including Google’s Nexus One. Early hands-on experiences with the device have been promising, but the company’s core product remains smartphones-exactly where HTC’s problems have been.

HTC today announced a “business realignment” plan that’ll include a 15 percent reduction in jobs.

HTC is now building a virtual reality headset, the Vive, as well as fitness trackers.

Once a key innovator and a top-ranked supplier in the smartphone market, HTC was squeezed out by the dominance of Apple’s iPhone and the emergence of Samsung as a major player.