BenQ will close a mobile phone research and development centre in Beijing as it continues to slim operations. The company opted earlier this year to stop investing in a German subsidiary due to rising losses.

The Taiwanese company will shift work from the Beijing centre to R&D labs in Suzhou, China, and Taiwan. Closing the Beijing facility will help it reduce costs and work more efficiently, it said.

Around 400 workers in Beijing will be affected by the closure, but some of them are expected to relocate to Suzhou.

The closure shows BenQ is still trying to recover from its push to become a global handset player via BenQ Mobile GmbH, the mobile phone operation it took over from Siemens AG last year.

The operation was such a burden to Siemens that it paid BenQ €250m (£165m) to take it over. It proved too difficult for BenQ to turn around, despite strong intellectual property and a solid brand name in Europe.

Analysts roundly blamed stiff competition in the mobile handset business for Ben’s troubles. Nokia and Motorola have been taking market share away from most of their rivals in the handset business this year.