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China’s ‘rice bowls’ cracking as big home appliance maker speeds up job cuts

      Published on Monday, 13 April , 2020      1120 Views     
China’s ‘rice bowls’ cracking as big home appliance maker speeds up job cuts

  • China Business

China’s unemployment situation continues to worsen as the coronavirus outbreak takes a toll on consumer demand both at home and abroad, with one of the country’s largest home appliance makers saying it is struggling to carry the “rice bowls” of tens of thousands of employees.

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Hisense Group, a Shandong-based manufacturer of television sets and other appliances, issued a statement on Sunday announcing that the virus was affecting business and it was speeding up its decision to let go “underperforming workers”.

“Home appliance markets have seen a large decline in both China and abroad because of the global pandemic,” the company said. “Hisense is particularly challenged because its overseas revenue accounts for 40 per cent of its total.

“Like many Chinese firms, we are at a key moment in weathering the crisis and are struggling to keep the rice bowls of tens of thousands excellent workers.”

The statement was issued in a response to rumours that the company plans to cut 10,000 jobs, or 12.5 per cent of its workforce.

The firm said reports of 10,000 jobs being lost was not accurate, but it did not provide a specific figure or respond to further enquiries.

Hisense’s troubles are the latest anecdote of the stress in China’s job market and show that unemployment pressure is spreading from small manufacturers and self-employed service stands to large enterprises.

Haier Group, another big home appliance maker in Shandong province, has also encountered trouble and asked its executives to take a pay cut to protect frontline jobs, the official Securities Times reported. The company did not immediately reply to requests for comments.

As China’s official jobless indicators are released on a monthly or quarterly basis, and cover only part of the job market, it is hard to gauge the real picture of China’s unemployment situation.

The temporary number of jobless people in China could be between tens of millions and 250 million, according to various estimates. China is expected to publish the official surveyed jobless rate for the end of March on Friday. The rate hit a

record high of 6.2 per cent at the end of February.

Beijing has made its concerns about employment known in recent weeks, given its importance to social stability in the world’s most populous country.

Premier Li Keqiang said last month that China’s economic growth rate, which is expected to fall below 3 per cent this year from 6.1 per cent in 2019, was not a big deal as long as the country’s job market was stable.

Category China Business | 2020/04/13 latest update at 3:13 PM
Source : SCMP | Photocredit : Google
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