ZTE Corporation, the second largest telecommunications equipment manufacturer in China, announced in a statement yesterday that the company ’s net profit attributable to shareholders of listed companies in the third quarter will be at a loss of 1.9 billion to 2 billion, and it will lose 1.65 billion to 1.75 billion in the first three quarters.
ZTE stated that the global economic and industry situation, the concentrated confirmation of low-margin contracts in the third quarter, the delay in the progress of some major international projects and the combined impact of the domestic operator's centralized procurement model on the company's revenue recognition dragged down the third quarter results.
The announcement shows that the loss in the third quarter was between 1.9 billion and 2 billion, compared with a profit of 299 million in the same period last year.
ZTE's losses are not "sudden." It is reported that in 2011, ZTE's annual net profit fell by 37% year-on-year. In the first half of this year, its net profit continued to fall by 68%.
The management of ZTE Corporation said yesterday that it apologized for the current operating results and decided to collectively reduce the salary. The relevant person in charge explained that the salary reduction is only for the management, and the employees do not reduce the salary.
Management also expressed confidence in turning losses into profits. For the European and American markets, ZTE said it will increase terminal investment. In emerging countries such as China and the Asia-Pacific, ZTE said it would seize the opportunities of wireless and wired broadband construction and pay close attention to the development of 4G.
In addition, ZTE also stated that it will abolish the representative offices that have long-term losses and cannot reverse losses in the short term, and control the number of employees and make structural adjustments.
In the wave of global IT industry losses and major layoffs, ZTE denied that the above statement meant layoffs. The relevant person in charge of ZTE stated that the company has always had plans to control the number of employees. The company will score employees every quarter, and the low score will be eliminated.
"This is within the scope stipulated by the Labor Law and cannot be said to be a layoff." ZTE said.
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