Acer to lay off 10 percent of China staff

The Taiwanese PC maker cites workforce overlaps with Chinese partner Founder as the main reason

Acer, one of the world’s biggest PC makers, will lay off 10 percent of staff in China as its workforce there overlaps with that of local partner Founder Technology, a company spokesman said on Friday.

The cuts fall mainly in logistics staff, such as procurement employees, and come less than a year after Taiwan-based Acer signed a memorandum of understanding with China's Founder Technology. Acer inked the deal to help it expand its share of the massive Chinese market.

Acer would not say exactly how many people will be cut in the layoffs, which began on Thursday. Founder will also lay off some employees. Taiwanese media estimated Acer's China staff at about 1,000 people.

"The reason for layoffs is that some of our positions are redundant," said Henry Wang, a spokesman for Acer in Taipei. "Things are going well in China. We’re not laying people off because the cooperation isn’t working out."

Wang likened the downsizing to that of two companies that find staff redundancies after a merger.

Acer and Founder agreed in May last year to join forces in designing notebooks, netbooks and mobile Internet devices for consumers in China.

Acer is also leveraging the existing sales channels and after-sales service run by Founder, which was was set up by Peking University in 1986. Founder hoped to gain access to global markets through the partnership.

As part of the deal, Acer assumed operations of much of Founder's branded PC business and paid Founder for the right to use its brand in China.

Acer said last year its China operations could generate up to a fifth of total revenue within five years. Its revenues reached a record high of nearly US$20 billion in 2010.

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Ralph Jennings

IDG News Service
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