JD.com Inc (京東) is preparing deep cuts to its workforce and rescinding some job offers as the Chinese e-commerce giant struggles to revive dwindling morale and rein in losses, people familiar with the matter said.
The firm told managers that it is looking to reduce headcount across the company, cutting some teams by as much as half, one of the people said, citing an internal e-mail.
Alibaba Group Holding Ltd’s (阿里巴巴) closest rival is reneging on some work contracts and offering affected college graduates token compensation of 5,000 yuan (US$744), the people said, asking not to be identified discussing a private matter.
Photo: AFP
The Information Web site earlier reported that JD could be slashing its workforce by as much as 8 percent.
The threat of firings has walloped morale and prompted many to explore employment elsewhere, the people said.
JD has come under increasing pressure from a more-diversified Alibaba, as Chinese consumption succumbs to a decelerating economy, while upstart rivals such as Pinduoduo Inc are drawing customers away.
JD’s move mirrors internal overhauls by Tencent Holdings Ltd (騰訊) and Didi Chuxing (滴滴出行), which are coming off their once-breakneck pace of growth.
However, JD, which has not posted annual net income since its 2014 listing, has had three of its most senior executives announce departures within the past two months, including its chief technology officer.
It has also reportedly come under fire for effectively trying to lower the salaries of its couriers — once a source of company pride.
JD spokesman Brad Burgess declined to comment on the job cuts, saying only that the company was getting back to its entrepreneurial roots.
JD Logistics said in a social media post that changing courier pay structures was necessary with wages being protected for four to six months during the transition.
Chinese tech companies are shaking up their ranks to tide them over during tougher times.
Funding has shrunk alongside a cooling in the nation’s economy, exacerbated by trade tensions with the US and regulatory clampdowns that fomented uncertainty and spooked would-be investors.
Chinese venture capital deals declined more than 9 percent to US$9.7 billion in the first quarter, PricewaterhouseCoopers LLP and CB Insights said.
JD is now threatening to fire people who exhibit four kinds of behavior: arrogance, complacency, over-spending on expenses and failing to deliver on initiatives, one of the people who saw the internal notice said.
The reductions come in part because the company has not been regularly weeding out under-performers and a culling is now overdue, the person said.
Earlier this year, JD said that it intended to let go of 10 percent of executives ranked vice president or above.
The departures and fears of job cuts have sapped morale among staff. Many use impromptu gatherings in staff eating halls and outdoor smoking areas to discuss redundancies and potential employers, said employees who asked to not be named.
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