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.

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.

Photo by Road to VR

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).

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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.

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Scott Hayden
Well before the first modern XR products hit the market, Scott recognized the potential of the technology and set out to understand and document its growth. He has been professionally reporting on the space for nearly a decade as Editor at Road to VR, authoring more than 4,000 articles on the topic. Scott brings that seasoned insight to his reporting from major industry events across the globe.
  • Get Schwifty!

    Sad to hear really, it is vital to have at least three players in an industry such as VR for it to move forward and innovate, if HTC should falter I do believe Facebook will carry on as it sees the long term potential, but it will be a signficant blow if HTC should die off.

    • JJ

      yeah it sucks oculus is cornering the market right now by underselling everything. They wont be turning a profit on HMDs for a while( but possible store content), just to outsell and win over the market so that at a later date they pick the prices and hardware for everyone. Its a shitty move played by the rich thats a for sure win because they have the money to burn. Doesnt matter whos headset is better at this point.

      • daveinpublic

        Ya, but without somebody selling HMDs at mass market prices, we’ll never get the chicken and egg scenario figured out. At least in a few years, VR may get enough momentum for all these companies to sell headsets at a lower price and still come out ahead.

      • brandon9271

        How do you know Oculus is selling the Rift at a loss? How could you possibly know that? Look at the WMR headsets selling for $200. I honestly don’t think any consumer grade HMD cost THAT much to produce. All gen 1 headsets are just cobbled together cell phone parts that are mass produced.

      • brandon9271
    • GunnyNinja

      Don’t worry, Pimax will come in and save the day…

    • HybridEnergy

      Actually, this move is a reduction as a phone company and they will concentrate more on VR, this is good news for us unless you are a wishful hater .

      • Get Schwifty!

        How on earth could you construe that as possibly a “wishful hater”, not sure if you intended that or not… but, what you say is in theory true, but it does point to a “company in trouble” which HTC most definitely appears to be at this moment. Hate to see them go under as a result.

        • ShiftyInc

          Indeed, a lot of bad news surrounding HTC these last two years. And not to forget they where on the brink of bankruptcy as well last year, before Google came in and saved the day.

        • HybridEnergy

          Oh they are in-trouble alright, that was my point, they can’t be a VR company and live off of their HTC smart phone money forever when they have been defeated in that market. They need to down-size or die as they call it in the big business, this is a down-sizing move, which is smart and tells me they want to stay alive and perhaps concentrate on VR and other things instead. It would be far worse news if you read “HTC declares bankruptcy , looking to sell VR patents and tech”.

  • Sandy Wich

    I feel bad for everyone who lost their job, hope they get work for themselves and their families.

    On another note though, what does one expect? Vive pro is a fkn joke, it’s hilarious it even exists.

    If they wanted profit and security they needed to help make VR mainstream, not appeal to the handful of VR arcades across the globe.

    • JDawg

      They defiantly fumbled by giving people the mis-impression that the Vive Pro was for consumers too. From what I see though it’s selling well and probably has a high margin so it currently might be one of their most profitable products at the moment.

      • HybridEnergy

        JDawg, don’t try and talk sense into people. Hilariously despite all the comments, the Vive Pro actually sold out, it’s their phone sector that made HTC a multi billion company that’s failed to compete lately and that’s why we see these moves, it has NOTHING to do with VR.

        • Sandy Wich

          If I make 5 match stick houses, and I sell 5 match stick houses, they sold out.

          Obviously Vive Pro manufactured more than 5 headsets, but if you think the pro was legit consumer mass produced you’re incorrect. Numbers are what matter, would like to see those personally.

          And finally, of course it has something to do with their ailing VR, how much though is something unknown to both you and me.

          • HybridEnergy

            Sandy, The Vive Pro was never meant to be a mass production consumer product. There isn’t enough of a VR market before the PRO released to even begin with. As I said before, when it comes to such large lay-offs in those numbers and multi-billion companies it’s typically because they have been defeated with in their primary sector, for them it was what made HTC that large to begin with…their phones.

    • ymo1965

      Totally agree. The Pro pricing is crazy. Although I sympathise with anyone losing there job, HTC only have themselves to blame. If they price the wireless adaptor later this summer with a similar insane price then expect more of the same.

    • HybridEnergy

      Another idiots who thinks this has anything to do with the Pro. 1500 employees laid off because of one HMD ? lmfao clearly no business majors in here. This is still fall out from their phone tech sector failure.

      • Sandy Wich

        1500 employees canned for a failed device and an industry wide drop in interest for your product seems reasonable to me. Especially if the other parts of their company aren’t successful.

        If you want to believe the decision to fire so many people had exactly nothing to do with the failing adoption rates of the Vive, lower than expected forcast for VR’s immediate success and the industry leading RnD of their competitors, “because they’re also an important part of their company’s future, not just the past of their poor phone business”, then that’s fine, but a direct quote that these people were specifically fired because of the phone division would help.

        Honestly though, if I was in the business of making money, and had a fancy new product that was beginning to save said company, i’d put more effort into selling versions of it that made money, instead of ones people hate, but that’s just me.

        Personally, I don’t expect Valve will be partnered with these guys for much longer. Maybe after the Vive 2 drops and it’s bulky, 1750+ dollars and sells out only because they made a 10 thousand units the partnership will end and maybe new horizons can happen.

        • HybridEnergy

          The Vive Pro sold out, it’s not a failed device. Their failed device is the smart phone, where they were completely manhandled by Samsung and Apple. VR is something new for HTC, it’s only a 2 year investment so far and even if it magically took over the gaming industry it still wouldn’t save them because of their size. If you know how a large company like that works then yea, you’d believe that it had nothing to do with this decision as well. Are you that naive to think 1500 employs were working in the VR sector and got canned because Sand Wich didn’t buy a Vive Pro though? go ahead I guess. lol

          • Sandy Wich

            It sold out because they made very few units. Tons of companies do this in order to sound successful. Vive never needed a VR arcade device that makes their company look like idiots, they needed to outsell PSVR. They can say w/e they want, make any excuse they want. Vive Pro was designed to be an enthusiast product to get them noticed during a dry market where literally all VR consumers were begging for an upgrade over CV1. It backfired, hard. And now they’re eating crow. The only good thing to come of the Vive Pro was the drop in price for the original Vive.

            I’m well aware of their cell phone business. VR is also a part of their business as well. You said earlier their loss of employees had literally, in your own words, “NOTHING to do with VR”.

            VR is a huge investment, and when your company fails to meet the industry wide expectations of a new frontier in difficult times, people lose their jobs.

            The Vive was the companies trump card after their stock drop in 2015 which almost ended their company. It was a huge investment and a risk, and it did literally nothing for them. The facts point to them holding on and after the Vive Pro launched and received immense criticism, after the OG vive failed miserably to achieve mass market appeal, after Vive FOCUS fails to beat Oculus GO to the market, with their company’s stock not recovering, with no divisions left to turn to, they started firing employees.

            I’ve seen this behavior my entire life from countless different businesses.

            As for you thinking they fired employees because I didn’t buy a Vive Pro….? Please, just keep the jokes to yourself.

          • HybridEnergy

            “It sold out because they made very few units.”

            That was their plan. They didn’t expect it to save 1500 employees then did they? lol It’s PCVR , it’s never going to out sell console VR just like PC never outsells flat screen console games for the simple marketing fact of being convenient and cheap.

          • Sandy Wich

            Yea I agree, they just didn’t plan for the backfire and universal bad press. Also they didn’t randomly fire 1500 workers, they were clearly holding out as removing people to stay afloat is publicity and stock market suicide or they would have fired them 2 years before hand when the company tanked. It’s not just a bit suspicious that they were canned after the launch of the Vive Pro was made out as a industry wide joke? The final match stick falls and breaks the farmers back. Or in this case at least throws it out.

            PC is a billion user platform, it absolutely has the potential to outsell consoles that sell at most 100 million units after 10+ years just to reset again.

            Check out Diablo 3 sales on PC, it sold over 12 million units in it’s first year. How many copies did Uncharted 4 sell in it’s first year? 8.7

            And Diablo 3 was a disaster, imagine if it lived up to the hype as a real pc game and not a glorified console port?

            Either way, yea, cheap sells, but give quality credit where it’s due too. Don’t let Sony brainwash you with their PR.

          • HybridEnergy

            The bad press and backfire from a VR device like the Vive Pro did them in? heh ok, think what you want. I’m a PC gamer myself, but it’s not honest to bring up Diablo 3 , a blizzard big hitter and compare to a PS4 exclusive never the less. Those PC big hitters are rare. We both know console out-sells PC, it’s okay, that doesn’t mean it’s better it’s just more accessible and affordable.

          • Sandy Wich

            I never said that backfire from a VR device did HTC in. Where you got that from, I’ll never know.

            Of course it’s honest to bring up D3. It’s a game, no different than any other. Blizzard made that, Naughty Dog, “Sony’s wonder developer”, made U4, which is the latest and greatest in one of their key platform franchises.

            Either way this isn’t going anywhere, I’m finished bud, have a great day. >:D

  • Oneben

    I hope they turn that ship around, but when they make decisions like the pricetag on the Vive Pro, I have little faith in that happening. Seriously, the thing has a bit better tracking than a Samsung HMD Odyssey, but otherwise identical specs, and is nearly THREE TIMES the price. Insanity.

    • brandon9271

      That’s what they get for being greedy

    • HybridEnergy

      The Vive Pro is awesome, get real dude if you think this has anything to do with their VR department. All of this is still fall out from them failing as a phone tech company.

      • Trenix

        I believe it had A LOT to do with vive pro. Many new people are wanting to get into VR, especially now, when the next generation of VR headsets are closing in with better specs, technology, comfort, and so on. I’m assuming there are many people like me who wanted VR to take its course into reaching perfection before buying it and dealing with its issues.

        When I heard about Vive Pro, I was going to buy it whether it was an upgrade or the next generation. However, the price matters. The company is going bankrupt so they ask for higher prices thinking it’d save them. Well they’re wrong. VR is expensive as it is. For me at the price they as for, it’s like buying a new computer. They didn’t even upgrade the lenses, improve their controller design, or made the headset wireless, at least not yet.

        I’d be ok with paying $800-900 with everything included, such as the 2.0 tracking bases and controllers, but not $1,400. You must be insane, bad buy. I rather wait for a headset with a more competitive price with similar or slightly lower specs.

        • HybridEnergy

          I would never put any of you people in any high ranking position in a multi-billion dollar company. You quickly forgot the business part of any of this and made this about yourself and why you didn’t buy the Vive Pro. You’re a nobody to a company that size and to hurt a company that size to flush 1500 employees it takes more than a low volume production product like the PRO that wasn’t meant to push a lot of units to begin with and they knew it.

  • Graham J ⭐️

    I doubt many will be surprised to hear that HTC’s pricing is borne of desperation.

  • R FC

    I had the pleasure of using a Vive Pro and the Vive Focus last night at an event in South London hosted by HTC UK and “thevrproject”

    Vive Pro was actually really impressive (compared to OG Vive) whether its worth the money is only a question the purchaser can answer. Vive Focus was very interesting, and I was lucky to try it because when I asked when / if its available in the Western markets, it wasn’t good news – although it can be purchased as a developer kit.

    https://www.instagram.com/p/Bkviay0gyug/?taken-by=proofresearchanddevelopment

    It was great to see HTC putting on a free event, and it was packed full of people, so at least they were getting the message out, and putting hardware on people’s heads.

  • HybridEnergy

    All of this is still fall out from them failing as a phone tech company. Their VR department is actually viewed by them as a future investment. the Vive Pro did fine on profit margins, it’s their phone sector that made HTC a multi billion company that’s failed to compete lately and that’s why we see these moves, it has NOTHING to do with VR.

  • I think the problem is the smartphones they makes… companies like Xiaomi and Huawei are far in front of HTC. But regarding VR, HTC is leader in China and one of the leaders of the world. For sure they have the support of Chinese Govt. to push VR forward, so I think that the company will continue be strong in VR.