Asus braces for layoffs

ASUSTEK IS putting on a brave face after inventory clearances left the firm with a 30 per cent hole in revenues, with company president Jerry Shen saying he expects gross margins to rise in the first quarter of 2009.

Asus has taken a bit of a financial beating lately, after exchange rate fluctuations, a "misjudgment" of the recession and rises in PC component pricing all took their toll on the Eeeee maker. To add salt to the wound, the firm has fessed up to an $85.25 million inventory loss, adding up to a total net loss of $82.36 million in the last quarter of 2008.

Asus recorded a net profit of $484.15 million for 2008, a 40 per cent slump year on year. Notebooks made up the highest per centage of Asus' sales, bringing home around 47 per cent of total revenue. Motherboards and graphics cards provided an additional 21 per cent, Eee PCs 19 per cent and handheld devices a paltry two per cent.

There are now whispers Asus may have to axe up to 10 per cent of its staff in order to reign in costs and weather the financial storm. Reports say the firm will lay off employees from its handset, optical drive and monitor divisions.

Rival firm Micro-Star International (MSI) is also mulling staff redundancies, with 1,000 employees worldwide said to be at risk. µ