HTC Corporation announced on Thursday that it would let go of 15 percent of its workforce after posting the worst quarterly losses in its company history, as the company struggles to get new customers in a maturing smartphone market.
The company decided it would need to remove about 2,000 employees from their payroll after the company said it had lost NT$8 billion ($249 million) in the second quarter, coming from a net profit of $2.26 billion during the same period the previous year.
HTC stock prices also sank to their lowest price in over a decade. Upon closing on Thursday, the stock fell 7.8 percent to NT$50.70.
While HTC was once the star of the highly competitive smartphone market, it has lagged behind, while Samsung Electronics Co., Apple Inc., Lenovo Group Ltd., Xiaomi Corp. and Huawei Technologies Co. have propelled ahead.
According to the announcement, the downsizing is part of a "business realignment" that aims to spur growth amid a difficult market.
HTC said that it plans to let go of 2,250 people before the end of the year in order to reduce operating expenses by 35 percent.
Aside from layoffs, HTC's restructuring involves forming new business units in order to focus on its key areas of premium smartphones, connected lifestyle products and virtual reality.
Chairwoman Cher Wang said that the company is "moving beyond the smartphone business." Hence, HTC recently introduced a fitness band and a virtual-reality device.
Wang has been doubling as the company's chief executive since late March.
HTC is not the only company that has decided to cut jobs in an effort to curb losses from the previous quarter. Lenovo has also announced plans to restructure its company, partly by letting go of around 3,200 employees, as a way to make up for its losses after a 51-percent drop in earnings.
Part of Lenovo's restructuring involves reducing the number of smartphones it releases to the market, indicating that they are victims of the same saturated smartphone market that is proving difficult for HTC to deal with.