HTC bleeding continues: Operations chief reportedly steps down

The move follows several other executive departures as the smartphone company struggles with its turnaround.

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Roger Cheng
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The HTC One
The HTC One Sarah Tew/CNET

The HTC exodus continues, with Chief Operating Officer Matthew Costello the latest key executive to step down, according to Bloomberg Businessweek.

Costello leaves office after less than three years at the smartphone manufacturer, according to the report. Fred Liu, president of engineering and operations, is taking on Costello's duties, while Costello stays on as an executive adviser after moving to Europe.

HTC confirmed Costello's departure and Liu's new role and issued a statement to CNET.

To achieve success, we've had to change when it was right for the business. Recently was one of those times. We took control of our business, narrowed our focus, and launched our new HTC One. Actions to streamline our business resulted in some reorganization and executive departures, but initial sales of the One have validated our approach. Response for our flagship device has been strong and demand has exceeded our expectations. We are confident that the business steps we have taken and continue to take are the right ones to lead to a strong resurgence of the HTC brand.

Costello is just the latest executive to leave his post as the Taiwanese smartphone company continues to struggle with its turnaround. While the HTC One has been a critical hit, it was plagued with supply issues early on and concerns that it would be overwhelmed by the Samsung Galaxy S4. Last quarter, the company's profit plunged 98 percent.

Last month, HTC Asia CEO Lennard Hoornik left the company following an absence of two months when he was "on leave." Chief Product Officer Kouji Kodera, who led HTC's general product strategy, left a week before Hoornik, according to The Verge. Vice President of Global Communications Jason Gordon recently exited the company after a seven-year stint. Other outgoing executives include Global Retail Marketing Manager Rebecca Rowland, Digital Marketing Director John Starkweather, and Product Strategy Manager Eric Lin.

The company did disclose that it sold 5 million HTC One units in its first month, a decent number considering the supply issues it has faced.

HTC has bet the farm on its single flagship smartphone, streamlining its product line to just a few handsets. While this represents an improvement over its hodgepodge of smartphones from just two years ago, it's unclear whether the move is enough to reverse the company's fortunes. Its line of One phones from last year won critical praise but also had its share of quality issues that hurt its reputation.

HTC will form a new division to improve the quality of its products, headed by Georges Boulloy, according to Bloomberg, which cited an e-mail it obtained from the company. The new team will handle the product life cycle, it said.

Correction, 5:03 a.m. PT: The HTC One sold 5 million units in its first month, not first five months, of release.

Update, 11:07 a.m. PT: Adds comment from HTC.