Aaron Lee and Yenting Chen

 

Inventec reportedly laid off employees on October 5 due to changes in its tablet PC orders. Company spokesperson Alexander Hsu confirmed the lay offs, but refused to reveal which client had cut orders.

Sources from PC players pointed out that Inventec's adjustment in work force is due to Hewlett-Packard (HP) halting its webOS tablet PC shipments. Fellow maker Quanta Computer recently cut its tablet PC production lines in Taiwan after RIM reduced its orders.

HP was originally optimistic about its webOS system and believed it could gain a strong share in the tablet PC market. It therefore demanded its upstream supply partners coordinate, and as the sole assembly partner, Inventec hired more than 1,000 employees to handle related production.

Hsu noted that the company is only making adjustments in personnel to fit current demand. As for rumors that the adjustment is related to a merger between Inventec and Inventec Appliance, Hsu denied the speculation.

As for the fourth quarter, Inventec may have difficulty maintaining its gross margin above 4%, while HP's decision to spin off its PC business had also reportedly had a strong impact on the company's revenue performance and may affect the company's shipments for the second half of 2011 and 2012.