HTC, the struggling Taiwanese smartphone maker announced that it is laying off 1,500 employees from its Taiwan manufacturing division in an effort to recuperate from months of bad quarterly results and bring the company back to profitability, reports TechCrunch. The layoffs will result in 25% reduction in HTC’s entire workforce, and the company said it expects to complete the layoffs by September.
“HTC continues to review its operations to ensure production resources align with key strategic initiatives, so that the company can more effectively compete in its target markets while maintaining its innovative edge,” an HTC spokesperson said in a statement provided to CNNMoney.
Despite huge popularity and critical acclaim for smartphones like the HTC One, the company has experienced its share of the market downturn steadily amid fierce competition from the likes of Samsung and Apple.
HTC has gone through reshuffles before, and the company is still working out the problems from a previous reorganization this year. Shortly after the president of the company’s mobile division resigned, HTC decided to merge its VR and smartphone divisions. The merger however hasn’t helped its recent handsets like the U12+ which debuted to complaints and lukewarm reviews. Although Vive Pro was praised, its high price and lack of accessories generated a lot of disdain.
HTC’s mobile unit went through bad times for several years, and last year the company sold its Pixel to Google for $1.1 billion. Although the sale helped reduce employee count by almost 2,000, and added some money to HTC’s bank account, it also suggested to the whole world that HTC had just handed over the best members of its R&D team to a rival. And, before that, HTC’s share price fell below its valuation, a sign that the company was worthless to the business community.
The company, once viewed as a leader in the smartphone industry, continued to suffer falling profits. Since 2014, HTC’s annual profits have been falling sharply, with recovery nowhere to be seen. With that said, HTC has asserted its commitment to staying in the mobile business, despite the obvious concerns that it might cause the company to collapse.
Between the reorganization, Google acquisition, and the recent rounds of firings, it could indicate that a smaller, more focused HTC is attempting to vie less in the crowded smartphone space and instead adhere to projects like VR. But the question remains whether or not that will be sufficient to turnaround the company’s fortune.