14 DAY TRIAL // In what we'd call the Summer of Layoffs, HTC officially announces that it too will see 15 percent of its employees find another place to work after Qualcomm and Lenovo passed through similarly difficult times.
Having struggled for years, the famous smartphone maker is restructuring its workforce in order to streamline its smartphone production and lower its operating costs. As it continues to battle against poor sales of its smartphones, the number of HTC employees is about to drop from 15,685 to 13,685, as 2,000 people will find new jobs after leaving the Chinese giant.
Apparently, HTC justifies the job cuts by saying that this would create greater focus and profitable growth in areas like premium smartphones, virtual reality and "connected lifestyle products." The reduction of 15% of its employees will result in a 35% reduction in operating expenditure, so HTC hopes that, making this radical move will help it survive the serious drop in sales of its premium smartphones suffered at the moment in China against Apple.
In addition to that, companies like Xiaomi, OnePlus and Huawei continue to chip away entry-level market share from HTC, leaving the company in a complete financial free fall.
An uncertain future
It's unknown exactly what those "beyond smartphones" markets are, but the latest products coming from HTC left many customers in doubt about the performance of HTC devices. After losing its second chief designer earlier this year and replacing the former CEO Peter Chou with the new CEO Cher Wang, it's clear that HTC is going through some very tough times, as now the days when it effectively controlled 10 percent of the smartphone market seem really far away.
The entire context must be read in the way the massive Chinese market is switching from a labor-heavy society entrenched in low-paid wages and scandalous lifestyles to a younger and more hedonistic society that has more money to spend. In this regard, the king of luxury smartphones is no other company than Apple, which right now earns record revenues in a country that a few years ago was too exclusivist to be affordable to the average Chinese.