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HTC to cut 15 percent of its workforce following poor sales
HTC’s long running revenue troubles have been well documented, but this year has seen the company plunge back into the red as sales of its flagship HTC One M9 smartphone have fallen flat. As a result, HTC has announced plans to lay off 15 percent of its workforce, in a bid to cut costs and improve its profitability.
The job cuts will affect staff worldwide and could reduce the company’s size by more than 2,250 roles. In total, HTC is looking to reduce its operating expenses by 35 percent over the coming months. HTC seems to be in such a poor state that further cost cutting measures could be extended into the first quarter of 2016 too.
After falling back into a loss in the second quarter, HTC is also forecasting another more substantial loss for Q3 2015, as demand for its smartphones remains weak and the Chinese market becomes increasingly competitive.
“We need a flexible and dynamic organization to ensure we can take advantage of all of the exciting opportunities in the connected lifestyle space.” – HTC CEO Cher Wang
On the plus side, HTC has acknowledge that it needs to look for new revenue streams outside of the traditional smartphone market. The company is planning to form a new business unit to focus on virtual reality and other connected lifestyle products, so we may see more from ideas like the HTC Vive in the future.
HTC’s Cher Wang wants to continue to focus on the high-end handset market, but said that the company is preparing to move “beyond the smartphone business”. Do you think that this sounds like a sensible move for the struggling smartphone manufacturer?