HTC, the Taiwanese tech giant, will slash their work force by 15% and cut operating expenses by 35%. The cause for the cuts are disappointing sales and a stock price crash that saw the company’s stock price fall so low it had to be suspended. The company has been struggling to find a foot hold after releasing a disappointing update to their flagship HTC One smartphone and sub par mid range options. HTC has announced a third quarter loss of about TWD8 billion.
The company recently took a severe hit on the Taiwanese market. Shares dropped 10% the day after an earnings call revealing the poor sales. The drop reached a daily limit on the Taiwanese index and trading of the company’s stock had to be halted. Since then, HTC’s stock price has fallen so low that it’s now trading lower than the cash on hand of the company, signalling that investors think the company is now worthless.
To remedy the situation, HTC says it will cut about 2,250 people from their work force by the end of the year and reduce their operating expenses by 35%. HTC will form new departments within the company to focus on high end smart phones, virtual reality and connected lifestyle products. HTC used to be the biggest Android OEM in the world a few short years ago. Since then a combination of HTC disappointing flagships, Samsung’s push into smartphones and the explosion of the mid-range smartphone market where HTC is weak has seen the company fall out of the world wide top 10 in phone sales.
HTC has endured a bad few weeks of press. Everything from their stock price crashing to spamming their customers and storing fingerprints in easily readable files have contributed to loss of consumer confidence in a once proud company. Chairwoman Cher Wang returned to the company’s day-to-day operations last year to try to right the ship but as of yet, we haven’t seen much in the way of progress because a strategic partnership with Valve to bring VR into the home.
Source: Wall Street Journal