ZTE cuts senior, middle management roles in restructure

ZTE cuts senior, middle management roles in restructure

Summary: Chinese telecoms equipment maker says its organizational review is ongoing with more changes ahead for underperforming parts, amid reports it is cutting 20 percent of its workforce in Q1 2013.

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ZTE has reduced some middle and senior management positions amid an ongoing organizational review which begun last year to streamline the organization.

A spokesperson told ZDNet there will also be changes in underperforming parts of the company. "ZTE's aim is to make our organization more streamlined and deliver improved business performance," the spokesperson said, adding the company has a "natural" employee attrition rate of between 5 percent to 10 percent annually.

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Chinese telecoms equipment manufacturer sidesteps rumors it is laying off 20 percent of workforce i the first half of this year, but stated it is undergoing an organizational review.

The company was responding to queries about reports about massive job cuts to its workforce in the first quarter of 2013.

The Investment Bulletin reported on Monday it learned the Chinese telecoms equipment manufacturer will be laying off 20 percent of its workforce in the first quarter of the year. The layoffs will also be staggered, with a certain percentage of contracts not being extended as they come up for renewal each month, the article said.

Streamlining underway

In January, ZTE announced plans to streamline itself to form a simplified, three layer structure comprising of headquarters, operational division and representative office, and some regional and structural grouping will be eliminated. 

"The reorganization will strengthen competitiveness and risk-management, ensuring all departments have access to key operational resources," ZTE said in the statement.

Rumors of large layoffs at ZTE have been circulating since ZTE's vice president Shen Li announced his resignation on February 17, 2013. However, the company's management has denied such claims that it laid off 10 percent of its workforce, explaining 5 percent left of their own will while 5 percent were those with the lowest performance and part of routine elimination, a separate report by Want China Times, noted.

In January, ZTE said it expected to book losses of up to US$439 million in its preliminary report for the year ending December 31, 2012, due to postponed contracts and decreases in revenue from terminals in the domestic market.

Topics: IT Employment, Networking, China

Ellyne Phneah

About Ellyne Phneah

Elly grew up on the adrenaline of crime fiction and it spurred her interest in cybercrime, privacy and the terror on the dark side of IT. At ZDNet Asia, she has made it her mission to warn readers of upcoming security threats, while also covering other tech issues.

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