Jane Chen / Shanghai Daily news

Nasdaq-listed UTStarcom Inc will cut 1,400 jobs, 17 percent of its global labor force, spokesperson Feng Guangshun confirmed yesterday.
Feng declined to reveal the number of workers from the China branch to be involved in the layoffs.  But analysts estimated most of the workers to be laid off would be from the Little Smart business, the Beijing Times newspaper said.
This decision to cut jobs came following a company release showing a 30 percent decline in net profit during the first quarter in its quarterly financial report published last Saturday in the United States.
According to the report, UTStarcom's net profit dropped to US$38 million despite a nearly 45 percent jump in net sales, which had reached US$901.8 million by March 31.
Analysts blamed the profit decline on the poor performance of its core business Little Smart, a cordless phone service.  Compared with UTStarcom's gross profit rate of 26.4 percent, the rate with Little Smart was a mere 4.3 percent in the first three months.
UTStarcom has been losing its dominance of China's Little Smart market.
Its market share plunged to 53 percent last August, down from 71 percent the year before; and it slumped to 42 percent at the end of 2004 when its key rivals, Shenzhen Huawei Technologies Ltd and ZTE Corp. saw their shares swell to around 20 percent and 10 percent respectively.
UTStarcom hopes the labor cut will lower its quarterly operational costs by US$40 million, the total sum saved could reach US$200 million by the end of this year.
To further help the company out of its financial dilemma, UTStarcom is seeking to move its business focus from Little Smart to other telecom sectors such as wireless, broadband and the Internet Protocol Television businesses.
Last month, its president Wu Ying said UTStarcom plans to decrease the proportion of Little Smart from 63 percent of its total global sales to 40 percent in 2005.
While applying to China's telecom authority for entering mobile phone manufacturing business, the company has unveiled the first GSM (Global System for Mobile Communication) phone model 3200 in March in cooperation with CEC Telecom Co Ltd (CECT).