HTC is reportedly laying off 1,500 employees in its Taiwan manufacturing division, something Bloomberg’s Taipei bureau chief Samson Ellis reports to be around 22% of HTC employees.
June 26: @htc says it will return to profitability this year
July 2: @htc says it will cut its Taiwan workforce by 1,500 people (about 22% of total employees)
— Samson Ellis (@samsonellis) July 2, 2018
CNET has confirmed that the company is indeed going forward with layoffs in Taiwan, although they declined to specify the number of employees affected. The move, as Ellis reports, appears to be a measure to bring the company back into profitability.
“Today’s reduction in manufacturing workforce is a decisive step in the realignment of resources across the organization, and will allow more flexible operations management,” said VP of Communications Patrick Seybold in an email statement to CNET.
HTC has been in financial difficulty for the past few years, with stock prices falling since their all-time high in 2011. The company took measures recently by combining it’s ailing smartphone business with its VR division, coming shortly after the company sold off much of its smartphone team to Google in a $1.1 billion deal, which saw half of HTC’s smartphone R&D division transferred to Google. The tepid reception of its latest smartphone, the U12+, certainly make matters any easier.
While recent consumer devices haven’t struck a chord, the company seems to have invested heavily in its enterprise and prosumer-focused businesses such as its out-of-home arcades, VR-based education initiatives, and its new higher-res HTC Vive Pro, which was priced clear out of the reach of most consumers at $1400 for an all-in kit, including SteamVR 2.0 tracking base stations and 2.0 controllers.
HTC has also lagged behind in terms of consumer pricing for its first VR headset, the Vive, which is currently priced at $500 all-in, a clear $100 more than the Oculus Rift at full MSRP.
HTC Vive Focus, the company’s $600 standalone 6DOF headset (with 3DOF controller) originally intended to support the Google Daydream platform, has yet to release outside of China. Lenovo Mirage Solo, the only 6DOF Daydream headset, is currently priced at $400, a clear undercut to Vive Focus’ supposed $500 – $550 pricetag (based on developer kit prices).
How the layoffs will effect the company’s VR strategy moving forward, we’re not sure. After Chialin Chang, HTC’s President of Smartphone and Connected Devices Business, resigned back in February, the company made a decisive move to put VR closer to its core business by promoting key VR execs to regional management positions overseeing both the smarthphone and VR divisions locally. This could mean the company is further trimming the fat from its smartphone producing lines, although that’s purely conjecture at this point.
We’ll be updating this piece as more information arrives, so check back soon.