A couple of years ago Acer was a rapidly rising star in the PC market but in more recent years the firm has falen on dark times. In Q4 2013, the company witnessed an industry-worst decline of PC sales of 24.1 percent, resulting in the firm dropping to the fourth place in global PC sales. Acer is currently on it third CEO in just three months. In addition to a previously announced 7 percent cut to its staff globally, Acer announced it would cut executive salaries by 30 percent.
We've seen this kind of strategy in recent history by another struggling Taiwanese OEM, HTC Corp. (TPE:2498). In HTC's case the strategy proved a double-edged sword as much of the company's top level talent defected elsewhere. Some HTC executives even plotted to steal company secrets after the pay cuts were announced. We'll see how well it works out for Acer.
In a press release Acer writes:
Acer acknowledges missteps in the past on resource allocation, and the over expectation of ultrabooks and notebooks with touch panel. Although the products were leading in design they did not accurately fulfill market needs.
Taking immediate action, Acer will formulate its product strategy with more caution and implement precise production planning and inventory control. Senior executives have also taken voluntary salary cuts of 30% from January to share responsibility.