HTC has confirmed that it’s laying off staff in order to streamline its business amid the coronavirus (COVID-19) pandemic.
The news was first reported by Taiwan’s English language China News Agency, stating that HTC was set to “strategically adjust” its staff and continue optimizing its organizational structure to reduce operational costs.
An HTC spokesperson confirmed this with Road to VR, citing a direct impact of the coronavirus pandemic.
“Like many companies, we are seeing impacts from COVID-19 and global economic conditions. HTC has continued its work to reduce expenditure by optimizing processes, practicing cost control and seeking prudent uses of new technology. These efforts have brought forth positive results such as continuous growth of gross margin of our primary products. However, HTC remains under tremendous pressure,” the HTC spokesperson told Road to VR.
“After cautious discussion and study, we are strategically reallocating human resources to optimize company structure and reduce operational expenditure. This has required us to make select employee reductions across the world. We want to thank all HTC employees for their contributions and we believe these efforts will help us to meet the innovation demands of our global customers.”
China’s business and finance publication Jiemian (Chinese) reports the company’s VR department was directly affected by the layoffs. The spokesperson declined to confirm which departments are involved or the number of employees affected. A source familiar with the matter told Road to VR that layoffs won’t affect China-based staff.
This isn’t the first time HTC has needed to strategically cut staff. In 2015, the company laid off 2,250 employees, or about 15 percent of its workforce at the time. Two years later, Google acquired much of the company’s smartphone engineering talent and intellectual property for $1.1 billion, leaving it to reorganize around its VR efforts.
Despite having captured essentially half of the VR market share opposite Oculus, in 2018 HTC laid off 1,500 of their Taiwan-based employees in the company’s manufacturing division. At the end of 2019, HTC cut an unspecified number of employees from its payrolls shortly after assuming its current CEO, Yves Maitre, who vowed to grow the company in the direction of both 5G and XR.
Outside of its smartphone troubles, HTC has had difficulties seizing the consumer VR market after its initial success with the original HTC Vive released in 2016; many of its headsets afterwards straddled the enterprise and prosumer segments such as the higher-resolution PC VR headset HTC Vive Pro and the standalone Vive Focus Plus. Arguably its second bona fide PC VR headset targeted directly at consumers, Vive Cosmos, faced a number of stumbling blocks with consumers, namely its high price and relative lackluster tracking and ergonomics.