Internal adjustments to the organizational structure of Chinese electric vehicle maker XPeng are nearing an end, and some departments have implemented small-scale layoffs, Jiemian News reported on November 10.
Last month, XPeng began a deep organizational restructuring and set up five virtual committee organizations to establish connections among different business lines within the company. Three organizations were established to coordinate around links such as marketing, customer service, communication, sales, training and sales management.
A staff member at XPeng said that the synergy between different development lines is more obvious and the decision-making efficiency is improved, but it will take time to verify the final effect. “Colleagues in different business segments have increased significantly. Everyone knows which case other departments are also following up, and we will have a more thorough understanding of the business. Decisions that do not conform to the actual situation can be avoided,” said the employee.
It is speculated that the organizational restructuring of XPeng is closely related to the unfavorable release of the G9. In late September, the model, which bears the burden of high-end development and increasing gross profit margin, was released. However, its complicated configuration and high price have caused dissatisfaction among consumers. Subsequently, XPeng urgently adjusted its pricing strategy to recover some losses.
After the poor market response, He Xiaopeng held several management meetings to reflect on the company’s operations and product strategy. However, He said that the organizational restructuring was not due to the unsatisfactory release of the G9. In February this year, the executive started personnel changes and adjustments of some lines, but at that time, the focus was on reducing management and operations costs. Some fresh graduates were laid off at that time.
He explained, “We actually adjust our structure every year, and this adjustment has been under discussion since the beginning of this year. This year, consulting companies were invited to conduct research. They suggested that this adjustment should be made at the end of the year, but we decided to do it two months ahead of schedule according to changes in the market.”
Sales data and stock price decline may directly indicate that XPeng has reached an urgent moment during which it must make changes. On November 10, its stock price in Hong Kong reached HK$26.25, down 9.48%, with a total market value of HK$45.249 billion – less than half of its competitors NIO and Li Auto. In October, XPeng delivered only 5,101 vehicles, down 49.68% year-on-year and 39.76% month-on-month, recording a monthly decline for three consecutive months.
However, He Xiaopeng remains optimistic about the firm’s sales volume, and expects it to improve in January of next year. In addition, the hot-selling XPeng P7 will be upgraded in the first or second quarter of next year, and He hopes this will support the firm’s sales.