Lite-On Technology Corp. recently confirmed reports circulating the company would cut jobs for the first time in its some 30-year history as a measure to reduce costs although it denied the cut would be a massive one.
Reports had circulated the company would cut 20-30% of its positions in
hope of paring down 20% costs. But the company`s executives stressed the
jobs to be slashed would account for barely 10% of its 1,500 positions.
Fuse causing the job cut is the company`s profit-plummeting liquid-crystal
display (LCD) business, which accounts for 40% of the company`s over
NT$100 billion (US$3.12 billion) revenue. Industry watchers pointed out
that the company`s LCD orders had been lured by rising underselling
suppliers like Innolux Display Corp., a subsidiary of the Hon Hai
Precision Industry Co., Ltd.
While seeing overhead cost surging to 6.5% last quarter from first
quarter`s 5.8%, the company failed to increase sales last quarter. The
company began overhauling operating strategy in July this year and started
put a "corporate-streamline" program into action this month in
consideration of unlikelihood for its revenue to sharply grow in short
The program aims to cut cost by 20% through abandoning money-losing
product lines, systematic attritions, and internal job shifts. The
streamline program will limit to only Lite-On, leaving its affiliates
Lite-On`s president, S.H. Lin, pointed out that the company remained
healthy and its productivity continued growing. But, it had to do some
adjustment in conjunction with the company`s computerization of operation
and part out-migration to mainland China. He stressed that manpower
streamline happens everyday at big companies throughout the world and for
his company the work should be carried out when operation is healthy.
Industry watchers pointed out that Lite-On should do more than simply cut
job to improve its finance. They believed that LCD business should be
mainly blamed for the company`s declined-profit operation since it had not
left the wan-profit business.