Lenovo to cut 450 international employees
February 26th, 2009China's largest computer maker Lenovo today said it would lay off 450 international employees in China to further reduce cost.
Those employees affected are the supporting staff of the company's oversea business, the company said.
"In light of the global economic problems, we must act decisively to reduce costs associated with global staffing and support functions to ensure our competitive strength," said Yang Yuanqing, Lenovo CEO, in a statement. "While our business in China remains very strong, many of our global support functions have employees based in China."
The latest round of layoffs will be completed by the end of next month, the company said.
Biz moves
February 25th, 2009Hand joins LaSalle
David Hand has been promoted as investment head for China in Jones Lang LaSalle after seven years as managing director of Jones Lang LaSalle Beijing and head of the China Retail Business. Hand said he expects to leverage the strong relations he and the Pan-China Investments teams have had with local and international developers and investors to facilitate transactions between these groups in China.
Sang is Lafarge CEO
French cement and building materials manufacturer Lafarge SA has appointed Sang Kang as chief executive officer in place of Cyrille Ragoucy, who was previously in charge of its business expansion in China. Ragoucy is returning to the company's French headquarters where he will take up a new position. Sang jointed Lafarge in 2003 after working for several years with Boston Consulting Group as partner and board director.
Ford new Starwood VP
Starwood Asia Pacific Hotels and Resorts has appointed Stephen Ford as vice-president and area managing director for South China, and general manager of Sheraton Sanya Resort. Ford has more than 40 years of management and work experience in the hospitality industry. Prior to this he was Starwood's regional vice-president for India, Bangladesh, and Nepal. Ford joined Starwood in 2001 as general manager of the Westin Bund Center, Shanghai.
WuXi CFO steps down
WuXi PharmaTech has said Benson Tsang, chief financial officer, is leaving the company for personal reasons at the end of this month. Edward Hu, chief operating officer, will act as acting CFO until a replacement is found. Tsang joined WuXi PharmaTech in 2006 as CFO.
The company's board has formed a search committee to recruit a new CFO. Tsang has agreed to provide transition services and to assist in recruiting his successor.
Unicom appoints Lu
China Unicom has appointed Lu Yimin as president, while Chang Xiaobing will continue to act as chairman and CEO, effective Feb 13. Zuo Xunsheng, Li Jianguo, Pei Aihua, Zhao Jidong, Li Fushen, Li Gang, Zhang Jun'an and Jiang Zhengxin were appointed senior vice-presidents of the company. Lu Yimin and Zuo Xunsheng remain as company executive directors.
The appointment signals the closing of the Unicom-Netcom merger.
McQuillan named GM
British Airways has appointed Kevin McQuillan as its regional general manager for the Far East with effect from March 2. Based in Hong Kong, McQuillan will be responsible for the airline's commercial interests on the mainland, Hong Kong, Taiwan, Japan, South Korea, and Philippines.
Dark clouds loom over the horizon for jobs
February 24th, 2009Multinational companies, which had gone on a hiring spree a couple of years back, have started to slash payrolls and freeze hiring as they struggle to stay afloat in the financial maelstrom sweeping across the globe.
Employees at many multinational firms, the most sought after employers in the past, are being bombarded with news of layoffs globally from their headquarters.
According to a survey by FESCO, a Beijing-based recruitment services provider for multinational companies, nearly 70 percent of the firms it polled have said they would trim their recruitment requirements for this year, while 27 percent said they have already started laying off employees.
FESCO polled 356 of its clients spread across the country and engaged a wide range of industries for the survey.
Over 44 percent of the HR managers surveyed admitted that their companies have slashed jobs, while 25 percent of the companies polled said they have plans to cut jobs this year, according to a survey conducted by KingField Management, a Guangzhou-based recruitment and executive search firm.
KingField surveyed 216 companies based in South China's Pearl River Delta region, half of which are multinational companies like Dupont and Bosch, according to Ren Ge, general manager, China operations, KingField.
Finance, telecommunications and IT industries were the hardest-hit industries, according to both the surveys.
Banks, insurers and asset managers worldwide had announced 325,000 job cuts since August 2007, when the credit crisis began to intensify, according to Thomson Reuters calculations until Feb 12.
The announced job cuts in technology and information technology firms worldwide have added up to 300,000 in late January, TechCrunch's Layoff Tracker showed on Tuesday.
Some global companies have also begun to downsize staff at their China operations, but most of them are carrying out such plans cautiously, experts said.
According to the KingField survey, of the companies that have already axed jobs, 68 percent have only cut less than 10 percent of their workforce.
"It shows that a majority of the companies are treading cautiously on cutting jobs," said Zeng Jiangtao, senior recruitment consultant, KingField.
Companies who have cut jobs or are considering such moves can be generally divided into two groups, said experts.
"The first category has firms like Citibank, Motorola, etc. who are actually impacted by the crisis and have no other choice other than to cut jobs to avoid bankruptcy," said Charles Lee from the Beijing office of Antal International, a UK recruitment company.
"The other section are those who are restructuring operations due to the crisis and have resorted to layoffs as part of this strategy," Lee said.
According to Zeng, most of the companies are charting layoff plans as a pre-emptive step to ward off recession.
"Many of our clients are unable to sell their products as before and so they are not too keen on investing further in the Chinese market. If they do not invest, we, who are largely reliant on their projects, cannot afford so many overheads. So we have to cut our cost base," said an employee at a European engineering and construction company, which is slashing jobs.
"No one knows when the crisis will end, so no one exactly knows when the layoffs will cease," said Antal's Lee.
He also urged employees planning to change their jobs to think twice before taking the leap.
"Nothing beats a stable job in an economic crisis. Companies are trimming people to replace existing hires with newcomers who do not cost as much. Companies that have got the mandate from their headquarters to hire people would also be permitted to lay off employees," Lee said.
Plan to cap pay for SOE executives
February 23rd, 2009A draft of a general regulation to cap salaries of high-level executives in State-owned enterprises (SOEs) will be submitted to the State Council for approval soon, an expert said yesterday.
The new regulation, drafted by the Ministry of Human resources and Social Security, also clarifies the system to assess performance and rules for expenditure, Liu Junsheng, a researcher with the ministry, who has participated in the discussion of the draft over the past six months, said.
"The new regulation provides a guideline and legal basis for supervising the salary structure of high-level management of all SOEs," he said.
The Ministry of Finance earlier this month solicited views on measures to regulate salary management in State-owned financial enterprises, which reportedly plans to set a ceiling of 2.8 million yuan ($411,765) on the annual pretax salary.
"Recent media reports on the fat salary packages of SOE executives have drawn the attention of the central government," Liu said. "So they have asked related departments to put a limit on the amount."
The new regulation limits the salary ratio between high-level and low-level executives to 10 to 12, the National Business Daily quoted sources as having said yesterday.
However, Liu said a final decision was yet to be taken. "The current average ratio is 10 to 14."
According to the National Bureau of Statistics, in the first three quarters of 2008, the average income of SOE employees was 20,576 yuan ($3,026).
The 2006 statistics from the State-owed Assets Supervision and Administration Commission show that the average salary of principals with 149 large SOEs was 531,000 yuan ($78,088).
Liu said the salaries of SOE executives should be controlled "because they are appointed by the government, and not chosen by their market value, and SOEs enjoy more favorable policies and resources than their private counterparts".
Dong Xian'an, a senior macro-economic analyst with the State-owned Southwest Securities, said the increasing income gap between high-level executives and common employees has affected the social stability, especially amid the global financial crisis.
"This regulation draft has come a little late. The gap has already grown too huge in recent years," he told China Daily.
"The salaries of high-level executives in SOEs should be made transparent to the public," he said.
However, industry experts said that a ceiling on salaries might affect the ambitions of some enterprising SOE executives.
"The government should pay attention to the incentive system in order to encourage SOEs to play a bigger role in the Chinese economy," Ma Guangyuan, a business commentator, was quoted as saying in the Information Times.
Earlier this month, the State-controlled Guotai Jun'an Securities was reported to have a 320-million-yuan salary ($47.06 million) plan in 2008, an average of 1 million yuan ($147,059) for each member of the staff.
231 companies say no to pay cuts
February 20th, 2009A total of 231 local firms said they will not cut salaries this year, a survey has found.
Of the 308 companies polled by consultancy firm Mercer, 20 percent make consumer goods, 19 percent are hi-tech firms, 17 percent are in machinery and electronics, and the rest span a variety of other industries.
Sixty percent, including Lenovo, P&G, Unilever, Dupont and Wanke Real Estate, are based in major cities.
Just about six firms said they will resort to salary cuts as a means of combating the financial crisis, while 154 said they will offer lower pay rises.
The rest said they have not made a final decision yet.
Liu Jianli, director of salaries and welfare at Lenovo, said: "We don't have any plans to cut salaries, but there will be limits on pay rises and we will be more cautious in recruiting new people."
Xu Jun, public affairs manager at Dupont Inc in Shanghai, said it too has no plans to cut salaries.
In another survey, by Kingfield Management, 75 percent of the 216 Pearl River Delta firms polled said they will not lay off staff this year.
Forty percent said they will increase wages but by a lower percentage than last year.
With its high number of export-oriented firms, the Pearl River Delta has felt the full brunt of the financial crisis.
Last year, the central government implemented policies that allow companies to defer contributions to pension funds and make lower employee insurance payments.
Getting a grip on labor
February 19th, 2009A comprehensive survey of labor to be launched by national statistic authorities this year is badly needed to replace the current unemployment data that covers only urban residents.
As the deepening global financial crisis and domestic economic woes tightens the employment prospects of millions of migrant workers and college graduates alike, the narrowly defined urban-registered unemployment rate can no longer provide the accurate information needed by policy makers.
Though the Chinese economy significantly slowed down later last year, the official unemployment rate released quarterly by the Ministry of Human Resources and Social Security showed only a mild climb from 4.0 percent a year to 4.2 by the end of 2008, with the number of registered jobless urbanities standing at 8.86 million.
Compared with the 11.13 million urban jobs that the country created last year, such a 0.2 percent increase in unemployment did not really deliver a sense of urgency.
It was only when another government survey revealed that 20 million migrant workers lost their jobs before the Chinese lunar new year that the country was awakened to a grave reality.
The Ministry of Human Resources and Social Security recently estimated that the urban unemployment rate could reach 4.6 percent this year, the worst since 1980. But that figure is obviously far from enough to highlight the severity of unemployment pressure.
On one hand, salaries of migrant workers contributed about 40 percent of rural families' income, so their job losses will make a huge dent in farmers' income growth.
On the other hand, some 7.1 million university graduates, too, are expected to have a hard time this year as the number of new jobs falls in cities.
The Chinese authorities have urged governments at all levels to make every possible effort to expand employment.
Nevertheless, if they want to come up with adequate policy responses, they first need to have a firm grip on the problem they're trying to address.
Therefore, statistical officials should do their utmost to ensure the success of the comprehensive survey of the labor force that they will conduct in four municipalities and more than 20 provincial capitals this year before extending it to the whole country in 2010.