Taipei--MediaTek Inc. (???), one of the leading integrated circuit designers in Taiwan, on Wednesday denied a local media report that the company plans to lay off about 3,000 employees within a year.
In a statement, MediaTek said it has no idea where the layoff speculation, which it called completely unfounded, came from.
The IC designer also said it has no plan to introduce an early retirement program to cut its workforce, emphasizing that day to day operations remain normal.
The response came after Chinese language Next Magazine (???) reported on Tuesday that MediaTek Chief Executive Officer Rick Tsai (???) assumed his position on June 1, one month earlier than scheduled, in order to kick off a restructuring program that will cut the workforce by about 3,000.
Before joining MediaTek, Tsai was president and CEO at contract chip maker Taiwan Semiconductor Manufacturing Co. (TSMC, ???) from 2005-2009 and chairman of Chunghwa Telecom Co. (???) from 2014-2016.
The magazine said that Tsai was known for his efforts to streamline operations and cut costs at TSMC and Chuanghwa Telecom by downsizing and that MediaTek Chairman Tsai Ming-kai (???) had brought him onto the board to transform the company, which faces escalating competition in the global smartphone chip market.
The report said that MediaTek would launch a four-phase layoff program that will reduce the current workforce of about 15,000 by 20 percent in one year.
According to the magazine, speculation by company employees expressed in LINE messages indicates concern that the IC designer could announce the layoff plan at the end of June or early July.
The report said that MediaTek acquired four smaller IC designers in Taiwan in 2015 and promised to retain employees at the buy-out firms, but has since concluded that there is redundant manpower.
Meanwhile, MediaTek said on Tuesday that it posted NT$18.44 billion (US$615 million) in consolidated sales for May, the second highest this year, behind the NT$20.82 billion recorded in March.
May sales were up 3.89 percent from April, when MediaTek's smartphone chip shipments were impacted by weakening demand from China. However, the May figure fell 25.16 percent year-on-year.
In late April, MediaTek gave guidance for the second quarter of this year, forecasting consolidated sales for the three months of NT$56.1 billion to NT$60.6 billion.
Market analysts said based on the estimate, MediaTek's sales growth momentum will continue into June, with NT$19.9 billion to NT$24.4 billion in revenue expected for that month.
Analysts said that with the peak season third quarter approaching, MediaTek is likely to enjoy about sequential increase in sales for the quarter of about 20 percent with Chinese clients expected to rebuild their inventories.
Shares in MediaTek closed up 2.86 percent at NT$252.00 on the Taiwan Stock Exchange on Wednesday, when the weighted index ended up 0.04 percent at 10,209.99.
Source: Focus Taiwan News Channel