HTC Explains another Exec Departure as Streamlining Operations

by Jeff Wiener on June 6, 2013

Struggling mobile manufacturer HTC, which has seen its presence in the mobile space dwindle as its fellow Android partner Samsung continues to dominate, has lost yet another senior executive, simultaneously begging the questions, how much senior management does one company need, and is there anyone left at HTC who hasn’t defected yet?

According to Bloomberg, HTC Chief Operating Officer Matthew Costello has stepped down after less than three years at the company, a tenure that has seen the company’s shares drop 76 percent. The company’s president of engineering and operations, Fred Liu, will reportedly assume “Costello’s responsibilities in an expanded role covering operations, quality, sales operations and services”.

What’s interesting in this latest chapter of HTC’s executive exodus in how the company views these radical changes, as HTC CEO Peter Chou explains the recent departures of at least seven high level executives not as rats fleeing the sinking ship or the dangerous haemorrhaging of high level talent, but as the purposeful deployment of a strategic plan intended to streamline the company, implying to me at least that these executives aren’t leaving per se, they’re being let go…or at least that’s what HTC would have us think.

HTC recently released the following statement from CEO Peter Chou: “To achieve success, we’ve had to change when it was right for the business. Recently was one of those times. We took control of our business, narrowed our focus, and launched our new HTC One. Actions to streamline our business resulted in some reorganization and executive departures, but initial sales of the One have validated our approach. Response for our flagship device has been strong and demand has exceeded our expectations. We are confident that the business steps we have taken and continue to take are the right ones to lead to a strong resurgence of the HTC brand.” [Italics mine]

While open for interpretation, its clear to me that HTC wants everyone to believe that the departure of seven top company executives was little more than an unavoidable by-product of the streamlining process, a process that Chou implies was not only purposeful, but successful as well.

Now there’s no denying that the company’s recent strategic reorganization has seen some immediate results, as the sales numbers from May show strong gains for the company’s flagship HTC One smartphone, but this does little to convince me that the company has revived its Android brand or that it has any hope of achieving long term success.

As mentioned, this most recent departure by Costello is the latest in a string of executive departures, including its HTC Asia CEO Lennard Hoornik, Senior Vice President of Global Marketing Greg Fisher, Chief Product Office Kouji Kodera, Global Communications VP Jason Gordon, Global Retail Marketing Manager Rebecca Rowland, digital marketing chief John Starkweather and Eric Lin, manager of product strategy — all within the past three months.

Whether some of these departures were initiated by HTC itself doesn’t really matter, the company has suffered a huge blow to its management structure and no matter how the company spins it, this isn’t simply streamlining operations and refocusing on its core brand; something fishy is going on at HTC and whether its Chou or his wunderkind CMO Ben Ho (seemingly some of the only executives left at the company) its likely to drive HTC right into the ground.

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Written by: Matt Klassen. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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