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.
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.
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.