“In survival mode”: the real drama going on at HTC is not about executives

May 24, 2013
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A well-known insider of the Taiwanese tech industry talks about the quiet but dramatic talent hemorrhage that is going on at HTC.

This week brought some really bad news and some really good news about HTC. First, there were several reports about a string of high-profile executives leaving the embattled company. Some of the execs even went as far as to publicly urge remaining HTC employees to leave the company, saying that they’ll be “happier” elsewhere. This is a worrying and unusual situation for a company of this caliber.

The good news was that HTC has apparently sold almost five million units of the flagship HTC One, as reported by WSJ. But if the One sells so well, why would executives defect?

Sascha Pallenberg, the influential German tech blogger residing in Taiwan who runs MobileGeeks.de, has taken to Google Plus to offer his insight into what is going on with HTC. The short version – the leaving execs are not a major loss for HTC, but the numerous engineers and designers leaving the company are much harder to replace.

Pallenberg calls the situation at HTC “dramatic” and considers that the recent Apple-HTC patent licensing deal and the Facebook Home/HTC First collaboration were “desperate moves to secure and bring in some cash.” He goes on to say that he personally discussed with several former engineers that left HTC for Asus, Acer, or other companies, and that he heard third-party accounts about similar cases. Sadly for HTC, the loss of experienced staff can be more crippling than that of “suits”.

Pallenberg concludes his posting by saying that “HTC is in survival mode”.

We have no reason to doubt the accuracy of Sascha Pallenberg’s assertions. Earlier this year, we’ve heard reports about HTC cutting R&D budget and forcing staff to work overtime to make it up. A disgruntled engineer sent an open letter to CEO Peter Chou to complain about it. So it’s reasonable to expect that some of the disgruntled employees have left for sunnier shores.

HTC is in a crisis, there’s no denying it, and we just hope that brisk sales of the One will be enough to take the company out of the woods.

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