HTC CEO to staff: 'Kill bureaucracy'

CEO of HTC Peter Chou told members of staff in an internal email that radical changes were needed within the company.
Written by Charlie Osborne, Contributing Writer

CEO of HTC Peter Chou told members of staff in an internal email that radical changes were needed within the company to improve levels of communication.

htc internal email kill bearocracy

In an email obtained by Bloomberg, the publication reports that the Taiwanese-smartphone maker has to start making changes to the business internally to cope with record drops in sales. Sent by Chou to employees, Chairwoman Cher Wang and the board of directors, the email said:

"We have people in meeting and talking all the time but without decision, strategic direction or sense of urgency. Bureaucracy crept in without clear ownership. We agreed to do something but we either didn’t do it or executed it loosely."

The email was sent on 9 Aug, and was titled "We are coming back.". It continued:

“We are disappointed that our sales are down while smartphone market share is growing, Our competitors can leverage their scale, brand awareness and big marketing budget to do things which HTC could not do. The fast growth from the last two years has slowed us down."

Changing market conditions and heavy competition from rival firms including Apple and Samsung have resulted in plummeting sales and a shrinking market share. The smartphone maker has predicted revenue this quarter to be as much as 20 percent less than analyst estimates, and falling earnings are likely to be hampering the company's ability to develop and market new phone models.

Recently, the firm was forced to close its South Korean office due to domestic competition from Samsung. HTC said the move was made to "streamline operations" and improve efficiency.

In June, the company also closed its main Brazil office, leaving only an after-sales base.

The 55 year-old CEO said that the company has to build on its internal business culture, employee commitment and improving customer relations. Chou also mentioned what he called "market noise", mentioning the One X handset as one of the firm's best products. The CEO commented that workers should 'remain confident' and not be "influenced by noises from market and industry".

The company's disruptions and low sales were described as "short-term challenges".

Chou concluded:

"Don’t let the processes, rules and norms to impact our important goals. Of course we have to follow certain rules and criteria but don’t let small things kill the major goals. Please make sure that we kill bureaucracy. Stay firm with the hero innovations and make them even bigger and deliver them."

A spokeswoman for HTC confirmed the validity of the email.

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