R E L A T E D C O N T E N T

BenQ lays off more mobile staff

Ex-Siemens mobile phone operation further downsized

Simon Burns in Taipei, vnunet.com 21 Nov 2006

BenQ plans to make further cutbacks in the global mobile phone business it purchased from Siemens one year ago, according to Chinese press reports.

The Taiwanese consumer electronics manufacturer has confirmed local media reported that several hundred staff were being laid off at its handset manufacturing plants in Shanghai.

Reports in the Shanghai-based Oriental Morning Post and other publications claimed that 40 to 50 per cent of BenQ's mobile manufacturing workforce in Shanghai, or more than 300 staff, will be laid off.

The facilities said to be affected were formerly owned by Siemens' Mobile division, prior to its sale to BenQ. Shanghai had been the company's largest manufacturing centre outside Germany.

BenQ's Germany-based mobile phone subsidiary, BenQ Mobile, was forced to file for insolvency protection in September, after the parent company withdrew funding.

BenQ admitted that losses at the unit, which have been estimated at more than $100m a month, were "unsustainable".

The parent had been keeping the operation afloat with cash injections. The unit employed approximately 3,000 of BenQ Mobile's 8,000 staff.

Last month, the insolvency administrator working with Benq Mobile managers said that he hoped the firm could attract new investment and continue operating as a designer and manufacturer of mobile phones for brand name vendors.

"BenQ Mobile disposes of unique technological competences which make the company attractive to investors," he claimed. Siemens has announced a $38.5m fund for workers laid off at the German Benq Mobile division.

German newspaper Süddeutsche Zeitung reported earlier this month that investigators were looking into claims that managers at BenQ and BenQ Mobile had not been completely open with information about the company's dire financial condition and had delayed the insolvency filing.

BenQ's struggle to absorb Siemens' ailing mobile phone division has seen the closure or consolidation of several administration, research and manufacturing facilities this year.

Siemens paid BenQ more than $300m to take the division off its hands, but the acquisition became a millstone for the Taiwanese company, which has been unable to restore it to profitability.

During BenQ's tenure, losses reportedly ballooned from $1.5m per day to more than $3m a day at their worst.