Smartphone giants lose 15,000 jobs to cheap phones

The world’s smartphone manufacturing giants are losing their lustre, leading to a steady stream of job cuts in previously-prestigious mobile units.

The most recent high-profile cuts occurred last week, when HTC and Lenovo each reported less than stellar earnings reports. HTC, after reporting a loss that exceeded analyst estimates five-fold (and caused its market valuation to fall below its cash assets), told investors it would cut fifteen percent of its workforce, amounting to over 2,000 jobs.

Lenovo, meanwhile, announced that it would reduce its workforce by 3,200 people, and cut its non-manufacturing headcount by 10 per cent. The company didn’t specify which specific jobs were at risk, but it pointed to flagging global PC sales, along with the need to streamline its mobile phone unit, as its key goals for the coming year. The company’s net profits were down 51 per cent year-on-year, and its Motorola handset division saw shipments plummet 31 per cent of 5.9 million units.

Those are only the latest in a string of layoffs to hit the industry. Quartz calculates that top manufacturers have cut about 15,000 jobs, mostly from their mobile divisions, in 2015 alone.

In July, Microsoft revealed it would cut 7,600 jobs from its phone business, a large part of which was culled from its acquisition of Nokia’s handset division. Microsoft has stated outright that device sales will no longer be the core of the phone division’s business, and it will focus on selling software (like Office) and services (like OneDrive) to consumers and businesses.

Back in February, Sony announced it would remove 2,100 jobs from its mobile communications unit, the branch responsible for its Xperia handset line. The unit’s net loss widened from $12.8 million in June 2014 to $184.4 million a year later. The company is now investing more deeply in its components business, which is generating more profit.