Acer boss to quit after firm posts NT$13 bil. loss

PHOTO: Acer boss to quit after firm posts NT$13 bil. loss

TAIPEI - Taiwanese personal computer manufacturer Acer Inc. yesterday announced the resignation of its chief executive and chairman, J.T. Wang (王振堂), after it posted a net loss of NT$13.12 billion (S$554,000) in the third quarter.

Wang will resign as CEO effective Jan. 1, 2014 and will hand over the chairmanship as his tenure ends in June 2014, the company said. He will be replaced by company president Jim Wong (翁建仁).

In a statement, the company attributed the dismal third-quarter operating loss to the gross margin impact of gearing up for new products and related inventory management, as well as the listing of the class action suit settlement compensations paid by its affiliated eMachines company.

Acer said there was also an intangible asset impairment loss, which includes trademarks and good will, of NT$$9.94 billion. The company's partnership with Gateway, Packard Bell and Founder Group (方正) contributed to the majority of the impairment loss.

The company described that the enlistment of asset impairment loss as an accounting move will not effect its day-to-day operations.

Acer said it also plans to cut its global staff by 7 per cent, a move that is estimated to save annual operating expenses of US$100 million starting next year.

The departure of the chief executive serving in the post since 2005 came as the company is struggling to adapt to a world where personal computers are quickly losing ground to smart devices.

According to the company statement, Wang said that he feels sorry for not being able to lead Acer back to prosperity in the past few years when the company has faced many complicated and harsh challenges.

"As Acer sees consecutive poor financial results, it is time for me to take responsibility," Wang was quoted by the statement as saying.

The company also announced the establishment of a "Transformation Advisory Committee" led by Acer's founder and current board member Stan Shih (施振榮). The committee has approved the issue of 136 million (4.8 per cent of the company's capitalisation) new shares to generate cash for new development needs.

Shih was quoted by Acer as saying that he was invited to return from retirement by the board.

Acer will introduce more competitive products after adjustments in its PC, tablet, and smartphone businesses in order to stabilize its existing markets, Shih said.