Mitac Int’l announces layoffs to reduce costs

Joyce Chang, The China Post

Mitac International Corporation announced yesterday its plan to lay off 150 employees to reduce operational costs by NT$150 million over the course of the year.

With the sales outlook for personal computers looking grim, the company has decided to downsize its workforce by about 10 percent. Among the 150 axed employees, Mitac’s Taoyuan factory cut 100 and its Hsinchu factory cut 50 workers. The company says that it will make severance payments in accordance with the Labor Standards Law, plus 80 percent of the normal one-month year-end bonus. In order to assist the laid-off employees, the company will offer to provide information about professional training and other employment opportunities. Affected by the economic slowdown and price war, Mitac estimates that its revenues for the first half of year will amount to NT$17 billion, down 10.5 percent from the same period last year. Mitac anticipates post-tax earnings for the first two quarters to be around NT$530 million. Its pretax earnings per share (EPS) is NT$0.6, down 35.9 percent from last year’s figure. Demand for computers and microchips fell this year as the U.S. economy — Taiwan’s biggest export destination — slowed and retailers soldout existing inventory before placing new orders. The global economic slowdown pulled down exports, which account for about half the nation’s economy, forcing the government to lower its economic growth target for the year to 4.02 percent from 5.25 percent recently. Despite the uncertain outlook, the company’s president Francis Tsai predicted a recovery in the computer industry in the second half of the year, buoyed by the introduction of a new chip from Intel Corp. The company is responding to the problems of the computer industry by transforming itself into an integrated network-solutions provider. This year it plans to reduce the revenue-weighting of desktop PC related products to 42 percent from last year’s 52 percent, whilst increasing the weighting of Servers and Workstations to 35 percent from last year’s 25 percent. The weighting of LCD PC and LCD Monitors should remain stable at 20 percent, with another 5 percent of revenue derived from IA (Internet-appliance) products.