In Clashes at Pegatron and ASUS we shed some light on the internal politics at ASUS and the different power struggles that are starting to effect the company. Power struggles are never good especially in an economic downturn and especially in the face of first ever quarterly losses. Well anyway, hot on the heels of the power struggle news comes a Reuters report suggesting ASUS are planning another major reorg, the second this year. The first cut their departments from 12 to 6 and now rumours sugges they might cut their departments to three and lay off between 5% to 10% of their workforce. According to Reuters:
Netbook PC pioneer Asustek (2357.TW) is planning a reorganisation, its second this year, to further streamline its operations, a company official said on Thursday.
No concrete plans or specific timeframe have been finalised, including the possibility of layoffs, said the official, speaking on condition that his name not be used because he was not authorised to speak to the media on the company's behalf.
"Nothing has been officially announced yet, we're still in the process of planning but the current framework is to further cut our business into fewer departments," he said.
Local media reports on Thursday said the company could cut its number of departments to three from six, and lay off 5-10 percent of its staff.
That reduction would come after Asustek said in January it was halving its number of departments to six following its first-ever quarterly loss in the last three months of 2008. [ID:nTPU001101]
The company pioneered the wildly successful low-cost netbook PC in 2007, but has been gradually losing market share as bigger players such as Acer (2353.TW), Hewlett-Packard (HPQ.N) and Dell (DELL.O) enter the market.
It seems all is not well at the founder of the netbook. A couple of years ago (18-months ago) ASUS were riding high on the launch of their Eee PC but now are being hammered in the market. Why? Who knows? They seem to be a ship without a rudder (strategy) right now and when that happens people reorginze the company! Heck you have to appear to be doing something right!
I really hope ASUS pulls through and pulls through fast. Lets face it they are a good company that have produced good products in the past. They are not afraid to innovate organizationally or product-wise. Spinning off their manufacturing to focus on brand-building wasn't a bad idea, but they should have tried to appease everyone in the process and ensure the transition was smoother than what it has been.
I know ASUS is not finished yet and that they are being severely affected by the current economic climate but being reactionary at this point won't suffice. The Eee PC was a sustainable product and their strategy in this market sector was good. One wonders if they have indeed lost direction and if they have when and why?
Reuters: Taiwan's Asustek plans further reorganisation-source
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