Taiwan's BenQ will reduce about 400 jobs by the end of this year at its Shanghai mobile phone unit, which it bought from Siemens last year, a SinoCast report said.
The report, quoting a company statement, said about 50% of the more than 800 workers at the handset plant in Jinqiao in Pudong New Area will be laid off.
The plant was previously a Siemens facility.
'We have to do this to improve efficiency and finish the reorganization of our handset business,' BenQ said in the statement without providing more details.
More than 30 employees in Shanghai have already been laid off, according to the firm.
BenQ Mobile's German unit had already filed for bankruptcy protection due to worse-than-expected business in Europe.
It will now focus on expanding business in Asia Pacific, especially China's mainland, the world's biggest mobile phone market with almost 450 million users, the report said.
BenQ Mobile's sales across the Chinese mainland now account for 10% of the company's global sales, and the figure will go 'much higher' in 2007, according to the company.
BenQ will launch 15 to 20 new phone models next year with the 'BenQ-Siemens' co-brand in China compared with about 10 in 2006.
BenQ will set up a new mobile phone manufacturing facility in Shanghai as it consolidates major production capacity in the city, the report further said.