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HTC to Cut 15 Percent of Workforce After Continuing Weak Sales

The company has been losing ground in phones for years, but has recently seen its sales fall even more sharply.

Asa Mathat

Struggling Taiwanese phone maker HTC said Thursday that it plans to reduce its workforce by 15 percent and slash operating expenses 35 percent amid a steep drop in sales.

HTC CEO Cher Wang tried to telegraph an optimistic note in the press release announcing the cuts.

“This strategic realignment of our business will ensure that each product group has the right focus, the right resources and the right expertise to win new markets,” Wang said.

But it’s hard to see how the cuts, while necessary to stem losses, will help the company as it seeks to continue in phones and expand into new areas such as virtual reality and fitness products.

The company, which once was among the leading sellers of smartphones, has seen its fortunes declining for years. HTC has struggled to compete against Samsung, which has far more marketing resources as well as the ability to tap other parts of the company for homegrown components like screens and processors. The company has also been widely criticized for not doing more over the past two years to make its flagship HTC One unit different from prior models.

HTC has been looking to shift beyond phones for a while, initially with a move into software and more recently with efforts in action cameras, virtual reality and fitness products, although products in that last category have been delayed.

Wang, HTC’s longtime chairwoman, replaced Peter Chou as CEO earlier this year.

This article originally appeared on Recode.net.