MUNICH—BenQ Mobile announced plans to cut up to 10 percent of its German workforce in an attempt to bolster profitability as it moves ahead after merging with Siemens AG’s handset division last year. The handset vendor said it plans to provide additional details on the move by mid-month.
The layoffs could affect up to 600 of BenQ’s 6,000 employees in Germany.
The job cuts come as no surprise. BenQ acquired Siemens’ German manufacturing facilities and costly labor when it took over the company’s handset business; a labor agreement governing the company’s workforce in Germany expired last month.
The BenQ-Siemens effort did well in handset volume shipments in the fourth quarter last year, its first quarter following the merger, selling 11.1 million units worldwide to gain 4.7 percent market share, according to Gartner. The numbers make BenQ the world’s No. 6 handset vendor in terms of volume. BenQ’s sales were strongest in the Europe, Middle East and Africa region. But the vendor reported a larger-than-expected net loss of $185.6 million for the fourth quarter of 2005, which the company attributed to revamping its product portfolio.
BenQ Mobile had been an original design manufacturer supplying Motorola Inc., but now faces the increased market pressure that comes with evolving into an original equipment manufacturer with its own branded phones. The top three OEM vendors—Nokia Corp., Motorola and Samsung Electronics Co. Ltd.—are increasing their global market share at the same time as average selling prices for handsets sold worldwide are dropping.
