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HTC Accused For Introduction Of 3 Shifts To Cut Costs

June 22, 2015 - Written By Vidur Sethi

The Taiwanese multinational manufacturer of smartphones and tablets – HTC has made it to the notorious columns of the news. The company has been accused of implementing 3 work shifts a day in its factories, in an attempt to cut costs and make more profit. The Taiwanese media reports that the workers had been working under 2 shifts and had an option of a regular 8 hour shift. There was also a system of an extra 4 hours devotion to the company, which would consequently lead to an extra pay. Now, with this idea of implementation of a 3 shift work system, the workers have been disappointed.

HTC has seen many ups and downs. The company’s history in context with the financial profits and the relationship which it had with its employees has been quite debatable. The company which has around 20,000 employees has witnessed loss in the previous few years. A September 2013 media report confirmed that HTC’s share of the global smartphone market is less than 3 percent. In July 2013, HTC released finalized second quarter financial results, and with it a warning that it may slip into an operating loss during the third quarter. The company met its revenue target but profits fell by around 80% year on year. In September 2013, HTC America had cut 20% of its employees to ‘streamline and optimize’ the company. Jason Mackenzie, the President of HTC America, had said during that point in time in a letter to employees that those affected by the layoffs will be treated with respect and the company will provide them with resources necessary to continue their careers elsewhere.

The company has now chosen a different path. HTC is ‘trying’ not to lay off people this time by introducing this 3 shift scheme. The company prefers to lay off the officials instead, and spare the employees. The workers have expressed their contempt with the new scheme, although HTC denies the accusations. According to Taiwan regulations, two hours for overtime is calculated at 1.33 times salary. After two hours it is 1.66 times salary. The three shifts will offer no overtime pay, a lot of economic pressure will lead to employees automatically leaving.

The issue of working time and wages are of paramount significance and are crucial. There is a need to ensure that profit is made, without causing any harm to the employees’ psyche. There have been innumerable instances when the employees have even come down to commit suicide when they were rendered jobless or were over-pressurized. The 3 shift scheme may be good or bad, but it is definitely better than strategies which lead to catastrophes like the Foxconn suicide which led to the death of 14 people in China.