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JD.com to slash pay for top staff as China growth slows

Chinese e-commerce company JD.com plans to cut senior management salaries by up to 20%, saying the move will help it combat slowing growth and improve benefits for low-paid staff. , clearly in favor of Beijing’s pressure to narrow the country’s wealth.

More than 2,000 employees at the deputy general manager level and above will be affected by the pay cuts, with cash salaries reduced by 10% to 20% starting January 1 next year. The largest reductions apply to the most senior employees.

Founder Richard Qiangdong Liu announced the decision in an internal email seen by Nikkei Asia on Nov. 22.

“I hope management understands and supports this decision! To all of our over 2,000 executive brothers, I’m sorry!” the 48-year-old billionaire said in an email.

“The group can always reverse cash payments for everyone in the next two years once JD returns to its previous high-growth phase.

This article is Nikkei Asiais a global publication with a uniquely Asian perspective on politics, economics, business and international affairs. Our correspondents and outside commentators around the world share their views on Asia. And the Asia300 section details the 300 largest and fastest growing listed companies in 11 economies outside Japan.

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A JD.com official confirmed the authenticity of the email and added, “Currently, we are moving forward with a welfare improvement plan centered on front-line staff.”

JD.com, founded by Liu in 2004, and many other Chinese technology companies are facing slowing growth as China’s economy slows and consumption declines. JD posted net sales of RMB243.5 billion ($34.2 billion) for the July-September quarter, following record-low sales growth of 5.44% in the June quarter, largely due to Beijing’s support. It increased by 11.4% from the previous year. On a zero Covid strategy.

Ryu stepped down as CEO of JD in April. He was one of many Chinese tech founders to loosen ties with companies in response to the Chinese government’s crackdown on the tech sector. However, he remains chairman and controls the company with 76.9% of the voting power.

Under Chinese President Xi Jinping’s “shared prosperity” campaign, authorities have launched a crackdown on tax evasion and other alleged misconduct in the tech sector. Businesses are also ramping up charitable donations in response to Xi’s call.

In an email, Mr. Liu added that he would personally donate RMB 100 million to expand company funds to help the dependents of employees who have suffered severe disability or death.

Mr Liu said the company will offer benefits, including medical insurance, to all regular employees “in phases”. This includes his more than 100,000 couriers at Deppon Logistics, a domestic delivery company that JD’s logistics division acquired in March. All Deppon contractors will become employees, Liu said, adding that with the acquisition of Deppon, JD.com now has more than 540,000 employees.

Beijing began urging tech companies, especially food delivery platforms, to improve conditions for workers last year. has been severely criticized for

Version of this article was first published in Nikkei Asia on November 22, 2022. ©2022 Nikkei Inc. All rights reserved.



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