ZTE said that its net profit for the first half of 2012 will be down by between 60 and 80 percent compared to the same period in 2011, with reports that the company plans to cut 12,000 jobs.
The anticipated net profit – revealed in a preliminary announcement of ZTE’s 2012 interim results – is projected to be between CNY154 million (US$24.1 million) and CNY308 million, compared to CNY769 million for the first half of 2011.
The Chinese equipment maker cited several reasons for the decline. It noted a reduced investment income, following the disposal of shares and reclassification of its holding in Nationz Technologies early in 2011; exchange losses due to the Eurozone debt crisis; and the postponement of tender activities in its home market.
According to Marbridge Daily, ZTE is planning to cut around 12,000 jobs in 2012, with overseas employees making up the bulk of the layoffs. The company was said to be looking at reducing the number of Chinese employees deployed outside of their home country, as well as cutting jobs where its market share has fallen.
More positively, ZTE said that its cash flow from operating activities had improved, due to “stronger efforts in cash flow management during the reporting period which resulted in faster growth in sales revenue collection.”