Did HTC manage to cut its R&D budget by forcing engineers to work without overtime?

February 8, 2013
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HTC quietly not paying overtimeAt the end of 2011 HTC’s quarterly financial statement showed that the company managed to reduce its R&D expenses from $NT5.5 billion ($185 million) to $NT 2.2 billion ($74 million), a cut of 60%. HTC didn’t reveal details of how it did that, but now reports in the Taiwanese media are suggesting that HTC engineers aren’t happy about the fact that for the last year they have been forced to work long hours without being paid any over time.

In an open letter to HTC CEO Peter Chou, an engineer has complained that HTC is asking at least 1,000 of its engineers to work a twelve hour day but only get paid for an eight hours. The extra four hours a day spread over 260 or so working days in the year means that the company is getting 1,000 extra hours of work per year per engineer for free. The total is a million extra man hours per year!

The letter caused HTC to state that the company complied with all of appropriate labor laws and workers get all the normal weekend and statutory holidays. The company also said that it encourages its employees to strike the right work-life balance and for everyone to make good use of their annual leave. As for over time, employees can still apply, however approval for overtime needs to come from department heads.

It isn’t entirely clear what is going on as the source of the information is based on machine translation, however I have worked for a company that went from being very rich and popular to being unprofitable in just one quarter. At first people tend to want to pull together to turn the company around and see their efforts come to fruition. However if the bad news keeps coming then employees soon start to jump ship.

So the question is now, could HTC’s problems be compounded by talented engineers leaving the company just at the time when it needs them the most?