One of China’s leading online used car marketplaces Uxin issued an internal letter on March 1 notifying its employees that due to the issues caused by the COVID-19 outbreak, the company will suspend its operations for an indefinite time. In accordance with local policies, employees of the company will receive the minimum living wage during this period. According to Uxin, work will be resumed after the company’s business situation improves.
SEE ALSO:Chinese Used Car Platform Uxin to IPO on Nasdaq
Just a day prior to this announcement, Uxin issued a wage reduction notice detailing the company’s plan to cut employee’s pay by between 20% and 40%. The temporary adjustment was expected to last until the end of May, but was interrupted by the abrupt decision to suspend operations.
Uxin’s business has been riddled with problems since last year, as the firm continued burning through cash, losing money following the departure of some high-ranking executives, including COO William Peng and CTO Qiu Hui. The NASDAQ-listed company has so far lost over 80% of its initial share price, and its market cap plummeted by more than $2.1 billion.
At the height of its growth, Uxin publicized that it was making an average of 2 transactions a minute. However, Chinese industry analysis points out that due to the impact of the epidemic, the second-hand car sector is entering a “shock stage” that will be characterised by layoffs, wage cuts, work stoppages and other disruptions.