Chicony Power Technology Co., one of Taiwan's leading power management solution providers, said on Friday that it is shutting down its electric motor division and laying of about 80 workers.
Chicony said the decision was made in August and the affected employees will be offered favorable severance packages.
The closure-hit employees, including the electric motor department's chief technology officer, will be paid in full for September despite that the layoff is expected to take place over the next week or so, the company said.
Chicony established the electric motor department five years ago to diversify its product portfolio, but after investing about NT$900 million (US$32.49 million) on electric motor development, the department generated only NT$30 million in sales, according to the company.
The only option was to dissolve the department and concentrate the company's resources on promising gadgets used in notebook computers, servers and low orbit satellite development, Chicony said.
As the electric motor department accounts for less than 0.1 percent of the company's total sales, the decision is unlikely to have an adverse impact on the operations.
The power supply device provider said it is helping the affected employees look for new jobs, while it will abide by Taiwan's Labor Standards Act and pay them severance pay.
Following the news about the layoffs, shares in Chicony rose 1.04 percent to close at NT$68.10 on the Taiwan Stock Exchange Friday, with the weighted index on the main board ending up 0.98 percent.
Source: Focus Taiwan News Channel