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Yageo denies reports on massive layoffs in Kaohsiung

16.7.2019
Reading Time: 2 mins read
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Source: Focus Taiwan news

Taipei, July 16 (CNA) Yageo Corp., a leading passive electronics maker in Taiwan, on Tuesday denied media reports that the company is laying off about 360 employees at a plant in Kaohsiung amid deteriorating global market conditions.

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Yageo, which produces components such as chip resistors, inductors and multi-layer ceramic capacitors (MLCC), said it always carries out measures to optimize its operations, but added that any departure of employees is based on performance and any workforce reduction is based on the Labor Standards Act.

Yageo did not disclose the number of employees who have recently been laid off.

Local media reported that Yageo’s layoffs have affected some executives, including the deputy head of the Kaohsiung plant, one of the two the company currently runs in the city.

The denial prompted investors to buy into Yageo shares throughout Tuesday’s trading session, pushing the price up 0.75 percent to close at NT$269.50 (US$8.69) on the Taiwan Stock Exchange, where the benchmark weighted index ended up 0.09 percent at 10,886.05.

In addition to Yageo’s denial, Pi Chung-mou (皮忠謀), chief secretary of the Labor Affairs Bureau of the Kaohsiung City government, said there have been some departures of Yageo employees at the plant, including resignations, but added that the bureau was unaware of any massive layoffs.

Pi said the bureau had not received any complaints from Yageo employees about the layoffs.

Pi said, however, that the bureau will stay alert over the employment conditions at Yageo’s plants in the city.

Yageo has about 3,000 employees at its two plants in Kaohsiung, the local media reported.

Market analysts said that after a recent price fall of MLCCs, the magnitude of the decline has been confined to 10 percent, indicating that the market conditions show signs of stabilizing to some extent.

Analysts said Yageo needs to make efforts to maintain its sales for the third quarter to a level seen in the second quarter.

In the April-June period, Yageo posted NT$9.58 billion in consolidated sales, down 15.9 percent from a quarter earlier and also down 50.2 percent from a year earlier after the company reported NT$3.068 billion in consolidated sales for June, down 5.9 percent from May and down 61.9 percent from a year earlier, due to falling product prices.

In the first six months of this year, Yageo’s consolidated sales fell 30.7 percent from a year earlier to NT$20.97 billion.

Yageo said that amid the continuing trade dispute between the United States and China, the global passive component market remains haunted by uncertainty, so the company preferred to stay cautious about the business outlook for the second half of the year.

Taiwan currently makes up about 30 percent of Yageo’s total production, and the company is keeping its high-end technology in the local market and planning to build a new plant in Kaohsiung.

Yageo said the new Kaohsiung plant is expected to cost the company about NT$16.5 billion and the construction is scheduled to be completed in two to three years.

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