According to insiders, the largest Chinese car manufacturer Saic wants to create thousands of jobs in its joint ventures Volkswagen and General Motors tear down. Also at the Electric car-Division jobs will be lost, two people familiar with the events told the Reuters news agency on Monday. The group wants to cut 10 percent of the jobs at Saic-Volkswagen and more than half at its subsidiary Rising Auto EV. It was said that 30 percent would be lost in the joint venture with GM.
Large-scale workforce reductions are rare among Chinese state-owned companies. However, there is currently a tough price war in the car industry as domestic demand is weakening. The planned cuts also reflect the rapidly growing spread of electric vehicles China contrary. Here Saic and its foreign partners have market shares to the US car manufacturer Tesla and private Chinese competitors such as BYD lost.
The staff cuts should not take place in the form of mass layoffs all at once, the insiders said. It is planned for 2024. A large part of the reductions will come through the introduction of stricter performance standards and severance pay for employees with lower classifications.
Sales recently fell by 16 percent
A Saic spokesman said the “speculation” about staff cuts was “untrue”. The company also does not set any targets for laying off employees. Saic did not respond to questions about efforts to encourage low-performing employees to quit or other strategies for downsizing. The company said it hired 2,000 people in the first two months of the year to focus on software and new-powered vehicles.
A GM spokesman in China said it would be “inaccurate” to say the joint venture plans to reduce its workforce by nearly a third. A spokesman for the VW China Group emphasized that no layoffs were planned.
Saic has been China’s largest automobile manufacturer for almost two decades. In the first two months of the year, however, sales fell by 16 percent compared to the same period last year. According to the annual report, the company employed around 207,000 people at the end of 2023, including its main subsidiaries.