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Compal, Eastern Home Shopping announce layoffs to reduce losses

Compal Electronics(仁寶電子), Inc. (CE), one of the leading Taiwan-based computer and electronics product manufacturing companies, announced yesterday a plan to lay off more than 100 workers from its tablet PC division due to lower product shipments.

Eastern Home Shopping & Leisure Co. (EHS, 東森購物), which operates the etmall.com.tw online shopping mall and TV shopping channel, will also let go 77 staffers to cut down operating loss.

Compal executives said the company recruited additional employees in anticipation of the potential boom in business after making a projection last year that its tablet PC business would double in 2012.

However, sales of its Android tablets, including Acer in Taiwan and mainland China's Lenovo, have not been as good as expected.

Compal subsequently adjusted downward its forecast to just 2 million units in 2012 — the same as that of a year earlier.

The company said that the variety of operating systems running on tablet computers is becoming wider. The company plans to produce a larger share of tablets that run on the Windows 8 operating system, Microsoft's latest release,

But Compal has turned more optimistic about business prospects for 2013 and expects to deliver larger shipments next year.

Compal was founded as a computer peripherals supplier in 1984. It has grown into the second largest contracted notebook manufacturer for leading computer companies in the world.

Compal became one of the latest victims in Taiwan's high-tech sector, which has been affected by the lackluster global economic situation.

In early October, ProMOS Technologies Inc., a local DRAM chip maker, announced that it would lay off about 1,300 employees, while Nanya Technology Corp., a memory chip manufacturing affiliate of the Formosa Plastics Group, said it would let about 200 employees go.

In the retail sector, EHS said it was forced to lay off 77 staff members, mainly shopping guides and computer engineers, due to increasing pressure from debt burden and operating deficit.

Outstanding debts at EHS have increased to about NT$4 billion, forcing the company to find a new owner with capital injection.

The new owner has decided to revise marketing tactics by playing product promotion video tapes provided by product suppliers on the shopping channel instead of hiring shopping guides to make sales pitches when introducing and recommending the products.

A company executive said consumers' rights and interests will not be compromised by the changes of corporate ownership and business format.

The layoffs will be carried out in accordance with the nation's labor regulations and EHS still wants to hire back laid-off colleagues after business revenues recover.

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