UTStarcom May Cut 40% of Staff
Netease Tech, 12/16/08
A source at Chinese network solutions provider UTStarcom (Nasdaq: UTSI) has stated that a recent 15% cut to staff in the Hangzhou area was just a preview of future layoffs after the Chinese New Year that could affect more than 40% of company staff. UTStarcom denied knowledge of future layoff plans.
UTStarcom announced layoffs for the Hangzhou area on December 15, and by the next day a portion of employees had already left the company. The largest number of layoffs was seen in the company's global services division, with a 30% cut to staff. A performance-based elimination system was adopted by the company to remove employees based on productivity indexes. Compensation for laid-off employees was provided based on the number of years spent working at the company, meaning that if an employee had been with the company for 3 years, he would receive 3 months' salary, plus one month's additional pay. Likewise, if he had worked for 5 years, he would receive 5 months' salary, plus one month's additional pay.
Editor's Note: While staff cuts at UTStarcom are likely to be due in part to the current global economic crisis, they are also likely the result of China's recent telecom industry restructuring. With China's fixed and mobile operators now consolidated into 3 full-service operators, former fixed-line operators are looking to gradually migrate their PHS users to mobile, making the outlook for PHS, one of UTStarcom's core product lines, less than rosy.
Keywords: HR telecom UTStarcom UTSI telecom equipment vendor
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