Taipei, Oct. 8, 2008 (CENS)--Hon Hai group, the Taiwan-based firm reportedly to be the world`s biggest electronics contract manufacturer, will lay off some 10% to 15% of its manpower by the end of this year if the global economy continues to downtrend, said its chairman Terry Guo.

Guo announced such decision at a meeting with its global senior executives, saying the firm will cut inventories, accounts receivables and idle assets.

Hon Hai Group spokesman C.A. Ting noted regular personnel evaluation is a normal corporate procedure to boost operating efficiency. The world-leading manufacturer has laid off 5% of manpower in each of the past several years.

The global financial fallout in the wake of the American sub-prime mortgage crisis that triggered tighter credit lines has impacted consumer confidence stateside and elsewhere-compromising the consumption of electronic items-which has forced Hon Hai sales short of expectations in the first nine months of this year. With the group`s global workforce numbering 600,000, Hon Hai`s proposed layoffs would put tens of thousands out of work by the end of this year.

Besides cutting inventories, accounts receivables and idle assets, Guo has also demanded resource-integration within the group, as well as adopting energy-saving measures to raise operating efficiency.

An institutional investor in Taiwan noted Hon Hai`s planned layoffs are in line with wide-spread manpower cutbacks in the wake of adverse impact from the sagging global economy. Besides, many Taiwanese-run factories in China, instead of labor reduction, have been moving to other Asian nations as Vietnam to cope with newly enacted labor-protection laws.

The global economic downturn and resulting declining demand for consumer electronics is saddling Hai Hai for the group has aimed at annual growths of 30% in both sales and earnings this year.

(by Ben Shen)