HTC announces plans for job, product cuts with disappointing July sales numbers
This morning, HTC announced that July’s unaudited revenue came in at NT$7.41 billion, bringing total (unaudited) revenue from January through July of NT$81.94 billion. The revenue numbers for July are 14.65% lower than what HTC posted in June and a 30.15% drop when compared to July of 2014. While we had hoped that HTC’s declining revenue would level off, HTC has revised its earnings forecast for the third quarter, projecting a loss of NT$5.51 to NT$5.85 per share.
HTC’s Chief Financial Officer Chialin Chang announced that HTC will cut jobs and discontinue certain product models in an effort to reduce cost and focus more on high-end devices. The cuts are expected to be “significant” and “across the board,” intended to reduce overhead and allowing the company to re-position itself in the marketplace.
It’s impossible to predict how things will turn out for HTC. The company already went through several rounds of restructuring over the past 18 months when HTC’s market share took a plunge. There’s also a way to cut overhead costs, but HTC needs to ensure that it doesn’t cut back so much that it hinders the development of new and innovative flagship devices.
We’ll be keeping our fingers crossed, hoping for the best.