3 Apr 24
News

SAIC denies reports of expected job cuts in joint ventures with European partners

SAIC denies reports of expected job cuts in joint ventures with European partners

Chinese state-owned SAIC Motor denied reports of incoming massive job cuts in joint ventures formed with General Motors (GM) and Volkswagen (VW). 

Anonymous sources have told Reuters that the Chinese brand plans to cut the workforce at the joint venture with GM by 30% and VW by 10%. The sources also claimed that SAIC intends to cut the workforce by half at the Rising Auto electric vehicle (EV) unit. 

According to sources, SAIC has a rating system for employees, where their performance is evaluated from A to D. According to claims, Employees with a D rating are offered payouts to leave their jobs while the ones with a C rating are on the line. The percentage of the employees (blue and white collar) at the two joint ventures are thought to be the ones who received lower ratings. 

According to local media, the alleged job cuts are the result of the setback caused by price wars, which mainly benefit rivals and result in the loss of market share against yet strong competitors, primarily BYD and Tesla

Figures support these claims, while SAIC claims otherwise. Being one of the top automakers in China in the last two decades, SAIC Motor announced wholesale sales of over 450,000 vehicles and retail sales of over 700,000 cars in January-February 2024. 

On the other hand, sales fell by 16% in the first two months of 2024, according to an SAIC filing. Tesla, which received unprecedented privileges from the Chinese government and BYD, the top battery-electric vehicle seller worldwide, is increasing their strength so much so that BYD Chairman Wang Chuanfu predicts that foreign brands will face up to 40% losses in their market share in the next three to five years. 

'No staff reduction'

Following the Reuters report, SAIC denied the claims and said, "2,000 new employees were added in the first two months of 2024." GM China noted that the "reports on cutting the workforce are inaccurate", while VW China Group said "there are no plans of cutting 10% of the staff." 

SAIC had 207,000 employees at the parent company and its subsidies by the end of 2023.  

The main photo is courtesy of Shutterstock, 1424101112.

Authored by: Mufit Yilmaz Gokmen