HTC scraps plans for Czech service centre

By bne IntelliNews October 2, 2015

bne IntelliNews -

 

Taiwanese smartphone maker HTC has scrapped a plant to open a service centre in the Czech Republic, Czech media reported on October 2. The move comes as the company announced plans to cut costs as it grapples with record-high losses. 

The loss of the project would be bad news for the Czech government, which has fought hard to bring new foreign investments in since coming to power in January 2014.

Under the initial plans announced in May, HTC was to open a service centre in Brno, creating some 1,000 jobs. Three hundred jobs were set to launch this year. 

Reports in the Czech media suggested in August that HTC investment in the country is at risk after it became clear that the Taiwanese company did not sign a lease contract with developer CTP Invest for the selected 10,000 sq m warehouse space in the Cernovicka Terrace industrial zone in Brno. Additionally, tens of HTC employees received notices shortly after being recruited, HTC PR representative for the Czech Republic, Ondrej Kuvik told Hospodarske Noviny.

HTC said in August it would cut more than 2,000 jobs globally, slashing its workforce by 15%, after posting its biggest ever quarterly loss in Q2 and forecasting another loss for Q3. A pioneer in early smartphones, HTC has seen sales fall in the last few years amid intense competition in the high-end section of the market, dominated by Apple and Samsung, while cheaper Chinese rivals are eating away at its sales in the lower end.

Currently the biggest Taiwanese investor in the Czech Republic is electronics manufacturer Foxconn. The company employs some 5,500 people in the country, where it has two plants. In July, Foxconn said it plans to invest CZK2.5bn in the country over the coming three years.

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