HTC And Lenovo Announce Job Cuts As Market Share Falls

Aug 14, 2015

HTC’s smartphone market share has dropped from 10% to 2%

When a smartphone vendor fails to receive traction from consumers, employees are the first ones to suffer. Taiwanese smartphone giant HTC has announced plans to trim its workforce by 15%, as it suffers from reduced sales.

HTC CEO Cher Wang said: “Now, as we diversify beyond smartphones, we need a flexible and dynamic organization to ensure we can take advantage of all of the exciting opportunities in the connected lifestyle space.”

The announcement followed the company’s projection of a much larger loss in the current quarter, than was anticipated earlier. HTC’s new phones have not been able to get customers’ attention either.

The company was once the pride of Taiwanese smartphone industry, and boasted 10% share in the global market; however, it holds a mere 2% market share now. According to HTC’s statement, this workforce cut is estimated to decrease operating expenses by more than a third.

Moreover, in a bid to increase efficiency, Lenovo Group Limited has also announced to reduce its workforce by 3,200 employees. These employees constitute 10% of Lenovo’s non-manufacturing workforce, and about 5% of the entire employee base. CEO Yang Yuanqing outlined two big challenges for the company: the need to streamline the company in a declining PC market, and to structure the mobile and enterprise businesses for its future growth.

Lenovo's 1QFY15 profit dropped 51% year-over-year (YoY). The company faces great challenges, which include a declining PC market, and increased mobile competition in China.

Source: Bidness Etc