Nov. 20 (NBD) -- A human resource personnel of Coolpad Group (Coolpad) was dispatched from its headquarter Shenzhen to Xi'an last Tuesday to announce job cuts in Xi'an Coolpad Software Technology Co., Ltd. (Xi'an Coolpad), an employee of Xi'an Coolpad told NBD.

According to the employee, the job cuts influence research staff only. From last Wednesday, HR started to talk to research staff one by one and negotiate with them about the severance package, added the source.

With this regard, another employee of the branding department of the Shenzhen-based Coolpad said to NBD that according to HR, the downsizing is small and it is more like a job adjustment for research staffs due to the company's business adjustment.

This branding employee further explained to NBD that Coolpad previously had a wide portfolio, which requires a big research team. Now that the company is shifting towards higher-end mobile phones, less research staff are needed. That is why the HR is adjusting positions for them, according to the branding employee.

NBD learned from the website of the National Enterprise Credit Information Publicity System that Xi'an Coolpad, incorporated in 2007, mainly engages in mobile communication technology, computer technology, multimedia software development and sales of self-developed technological products.

Being one of the seven research centers of Coolpad, Xi'an Coolpad is responsible for the research and development of products targeting Central Asian market.

When the NBD reporter went to Xi'an Coolpad to seek an interview about the layoff, the front-desk receptionist told NBD that they hadn't received any information yet. In addition, his request to have a conversation with relevant persons in charge was declined. 

NBD noticed that this isn't the first time when Coolpad is reported to plan a layoff, which reflects, to some extent, the financial situation of Coolpad.

Coolpad reported a loss of 4.2 billion HKD (538.4 million U.S. dollars) in 2016. Worse still, its business performance didn't improve any this year, according to the company's announcement in August. As of July 31, 2017, the listed company posted a revenue of 2.716 billion HKD (348.2 million U.S. dollars), down 52 percent year on year and the company's current assets went lower than its current liabilities, said the announcement. 

Wang Yanhui, head of the Shanghai-based Mobile China Alliance, told NBD that Huawei, OPPO, vivo and other mobile phone manufacturers take up most of the market share in China and such competition landscape is hard to change in the short term.

In fact, in the face of challenges, Coolpad has taken measures including pushing into the U.S. market and reusing its land resources.

Du Jinbiao (James Tu), chief executive officer of Coolpad Global Sales & Service and executive vice-president of Coolpad, said in a media interview in October that capital was no longer a problem for Coolpad since September this year, and the company also met with various investors.

Du also refuted the idea that Coolpad diverts to real estate and gives up China market, saying that the company will not give up on the mobile phone business which it has been doing for over twenty years or abandon the domestic market. He said that Coolpad will in the future focus on the high-end mobile phone sector and the cooperation with operators.

However, the current layoff news once again raised concerns about Coolpad' financial situations.

Wang said that the biggest problem facing Coolpad is whether the company has the money to expand its mobile business. As long as Coolpad can solve its financial problem, it still has a chance, he added.

Email: gaohan@nbd.com.cn