Quanta sackings a ‘quickfix’ to worried investors

TAIPEI, Taiwan, The China Post Staff

Institutional investors shed Quanta Computer shares yesterday after concern at the news Quanta is planning to lay off 1,500 employees in Taiwan within one year. The investors saw the massive layoff as the company’s quick-fix to reduce its operational costs and cope with its weakening businesses.

Quanta shares at one point dropped to its daily limit in yesterday’s trading. It fluctuated throughout the session and finally lost NT$3 to close at NT$63.5.

In reaction to investor concern, Quanta declared it was not intending to lay off all 1,500 employees, but would keep a portion of them to work at its affiliates such as Quanta Display to cope with its plan for worldwide business adjustments.

Quanta is not the only computer company to cut its working staff. Taiwan’s other leading notebook computer company, Compeq Manufacturing, also plans to have more than 700 employees retired, beginning from mid-July. First International Computer (FIC), which had cut its working staff by 200 employees last year, may lay off another 100 employees within this year. Meanwhile, it’s planning to move all the 200 R&D staff at its Linkuo office in Taoyuan to the Taipei headquarters and cut down the Linkuo R&D center. These layoff plans are seen as a sign of the slower-than-expected international market recovery. Though it’s reported that they did not stop expanding their operations in the Chinese mainland where the labor costs are still far lower than those in Taiwan. For example, ASUStek, a leading motherboard manufacturer in Taiwan, moved its buyers’ order to its Suzhou factory in the mainland from its Chungli factory in Taiwan on the request of its buyers’ demands for lower production costs.