HTC COO Matthew Costello joins long line of high-level executives leaving the smartphone maker

What started as a trickle of high-level departures at HTC has quickly grown into an exodus, following reports that the company’s Chief Operating Officer Matthew Costello also plans to step down.

Bloomberg reports (via The Verge) that Fred Liu, currently President of Engineering and Operations, will have his responsibilities extended to make up for Costello’s exit. Henceforth he will head-up operations, quality, sales operation and services, according to an email sent by Liu – and seen by Bloomberg – to HTC employees.

HTC confirmed earlier this month that Lennard Hoornik, CEO of HTC Asia, had left the company to pursue “other interests”. The departure followed a similar exit by Jason Gordon, Vice President of Global Communications and Chief Product Officer Kouji Kodera.

A number of other employees, including Rebecca Rowland, Global Retail Marketing Manager, John Starkweather, Director of Digital Marketing and Eric Lin, Product Strategy Manager have also left the company, sparking fears that the company could be in a state of freefall.

HTC has struggled of late. It launched the HTC First, the only smartphone to come pre-installed with Facebook Home – Facebook’s custom Android launcher, lock screen and messaging experience – in the United States earlier this year. Media reception has been mixed, however, forcing Facebook to abandon the launch of the smartphone in the UK indefinitely.

HTC has also closed Watch, its own exclusive movie rental app, in multiple countries across Europe and has reportedly ditched plans to build a tablet using Windows RT.

The company is hoping that the HTC One, its latest flagship Android smartphone, will drive substantial revenue throughout the year. The company has already hit “around 5 million sales” for the device, but that pales in comparison to the 10 million units sold by Samsung for the Galaxy S4. It’s still early days for the handset, but HTC will be hoping that it can claw back some market share from Samsung, while keeping competition from other mobile platforms such as iOS, BlackBerry 10 and Windows Phone 8 at bay in emerging markets.

There’s signs of a turn-around – the company recently teamed up with Google to announce a so-called ‘Google Edition’ HTC One running stock Android and reported healthy sales figures for the month of May today, but it’s difficult to know what’s happening behind the scenes. Some reports have even suggested that HTC chairwoman Cher Wang has given CEO Peter Chou six months to kick-start the company’s resurgence – or risk losing his job.

Perhaps HTC knows that to improve its market position, it needs yet another reboot and fresh injection of talent throughout the company. In that case, the departure of Matthew Costello should be seen as a passing of the torch and a beginning of a much-needed transitional period for the smartphone maker.

If it represents a simple lack of trust and belief in the company, however, HTC could be facing a very difficult year. TNW has reached out to HTC to confirm Costello’s departure.