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HTC To Start Slashing Staff As Profits Tumble, Revenues Take A Nose Dive

HTC To Start Slashing Staff As Profits Tumble, Revenues Take A Nose Dive

Overnight the Company announced that they slashing jobs and discontinuing several models as part of its strategy to focus on high-end devices to better compete with products from Apple and Samsung.

It is not known whether any jobs will go in Australia.

Overnight the Taiwanese Company announced that HTC is expecting an operating loss of $166 million dollars on unaudited revenues $1.07 billion for the quarter ending June 30.

Shortly after the announcement HTC’s stock plunged to its lowest at $2.99 a share, which is lower than the company’s book value.  

This downturn in company profits follows another one posted in October of last year. 

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HTC has managed to lodge slim profits, including for the year ended 2014, but has posted smaller profits for each quarter before this projected loss.

Founder, Chairwoman and Chief Executive Officer Cher Wang has stated she won’t consider mergers, even after a steady loss of market share pushed the company below the global top ten phone makers.

HTC will now change its product strategy to produce fewer models at longer time intervals while focusing on profits instead of growing shipments, Chief Financial Officer Chang Chialin told reporters on a teleconference Thursday.

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“The cuts will be across the board,” Chief Financial Officer Chialin Chang said “They will be significant.”

Chang said the cost reductions would extend to the first quarter of next year, but declined to give further details.

A pioneer in early smartphones, HTC has been dismissed by industry watchers as confused, unoriginal and uncompetitive.

The company has been losing market share over the past few years, hit by intense competition at the high-end of the market from the likes of Apple and Samsung Electronics while budget Chinese rivals have also eclipsed its low-cost offerings.

HTC shares have fallen 51 percent so far this year. The stock closed 1.69 percent lower before the results were announced.

Chang said HTC was banking on selling high-end models in emerging smartphone markets such as India, where he said the company has a 20 percent market share of phones priced between $250 and $400.

Analysts, however, are less optimistic, saying HTC is likely to continue to struggle for the next four quarters at least.

“We believe HTC will keep losing share in the smartphone market and will keep losing money,” analyst Calvin Huang with Taiwan’s SinoPac Securities wrote in a recent research note.