After initiating layoffs in early 2021, Shenzhen-based new energy vehicle maker Baoneng Motor continued with the second batch of layoffs on July 22, Auto-time reported on Tuesday. Baoneng has not yet commented publicly on the matter.
With the implementation of the second batch of layoffs, the number of Baoneng employees has plummeted. One employee from Baoneng Motor’s Sales Department told Auto-time, “the automobile department has been cut from about 23,000 people last year to about 8,400 now, and it is still continuing at the rate of cutting hundreds of people every week, with the layoffs exceeding 65%.”
Zhang Feng, an employee who has just completed his resignation from Baoneng Motor, told Auto-time that since the beginning of this year, Baoneng has implemented two layoff plans. The first round began in February this year, with an overall layoff ratio of about 30%. The second batch began on July 22, and layoffs this time are expected to be larger than that of the first batch.
At the same time, the problem of salary arrears is getting worse. Zhang Feng said it had become common for Baoneng to default on employees’ salaries, cease year-end awards and cut off payment of social security. “The two-month year-end award promised last year has not been issued so far. The salary for May was paid on July 10 this year, and the salary for June and July has not been settled yet.”
When Baoneng first entered the automotive industry it became known for its heavy spending, leaving the impression that the firm had deep pockets.
In 2018, Yao Zhenhua, founder and chairman of Baoneng Group, announced that the company would invest 10 billion yuan ($1.54 billion) every year for the R&D of new Qoros Auto cars for five consecutive years. In November 2020, Yao’s ambitions remained unchanged, stating he wanted to “strive to build Baoneng Auto into an automobile group with strong competitiveness and international influence in 10-15 years.”
On June 15, Baoneng Group and Guangzhou Development Zone held a signing ceremony for a strategic cooperation agreement. State-owned enterprises in the Guangzhou Development Zone will invest 12 billion yuan in Baoneng’s new energy vehicles. Even so, this failed to give the firm’s employees’ enough confidence.
Now, Baoneng’s self-developed models have not yet been listed, but the firm has started to lay off a large number of employees.
In Zhang Feng’s view, Baoneng has opened hundreds of dealers before the manufacturing bases were put into production, wasting a lot of financial resources and labor. “The 12 billion yuan in financing is not clear, without knowing how much money is in place,” so that the financial personnel are frequently urged every day, but they dare not make any promises.