HTC sees earnings drop, denies layoff rumors

Taiwanese smartphone maker refutes reports staff will be retrenched, after company's Q2 profits slump and closure of two overseas offices.

Taiwanese smartphone maker HTC denies rumors it plans to cut jobs following an earnings drop in its latest financial report.

Taipei Times reported Monday the company's CFO and spokesperson Chang Chia-lin said market speculations of job cuts at HTC were "untrue" in a filing to the Taiwan Stock Exchange.

The report said Chang was responding to rumors after Chinese-language newspaper United Evening News reported last Friday, without cited sources, HTC had removed some temporary jobs at its domestic plants as well as restructured its overseas offices and research centers.

HTC on Friday announced its latest second-quarter 2012 earnings . It said its unaudited net profit in the quarter was NT$7.4 billion (US$246.7 million), falling more than half, or 57.8 percent, from NT$17.52 billion (US$584.1 million) reported the same quarter the previous year.

Chang added in the filing that removing the temporary jobs was just the company's response to short-term workforce demand, and not indicative of anything unusual or measures to cope with poor sales, Taipei Times reported. "The company is not renewing contracts with workers when their contracts expire," the spokesperson added.

However, the report pointed out HTC said it was "undergoing organizational restructuring and workforce adjustment" at its offices in Brazil and in North Carolina to improve operational efficiency and enhance core competitiveness.

Taipei Times said the company closed its office in Brazil last month, affecting 30 employees in Sao Paulo, and also wound down a research and development center in Durham, North Carolina, in the United States, affecting about 50 jobs.

While the results were an improvement from the first quarter--when profit plunged 70 percent--the announcement marked HTC's third consecutive profit slump .

In contrast, South Korean rival Samsung on Friday posted stellar second quarter profits , thanks to strong smartphone sales.