- Unnamed sources claim the automaker rates employee performance from A to D.
- Workers with a D rating are being offered payouts to quit while C-rated staff are in an “uncomfortable position.”
- SAIC has denied reports it plans to significantly reduce employee numbers.
Chinese carmaker SAIC will reportedly slash thousands of jobs this year at the joint ventures it operates with General Motors and Volkswagen, as well as at one of its electric vehicle subsidiaries.
It is rare for large job cuts to take place at state-owned Chinese companies but SAIC is making the workforce reductions at a time when electric vehicle sales slow down and the local economy falters. A price war is also forcing brands to make changes. For SAIC, these may include cutting 30% of jobs at SAIC-GM, 10% from SAIC Volkswagen, and over 50% of the workforce at Rising Auto EV.
Sources say the job cuts will come throughout 2024 rather than immediately. Many jobs will be lost through strict new performance standards while payouts will also be offered to lower-rated employees who choose to resign, Reuters says.
Read: Audit Finds No Evidence Of Forced Labor At VW And SAIC’s Xinjiang Factory
Information about the planned job cuts comes from two unnamed sources thought to have knowledge of the matter. Interestingly, a spokesperson from SAIC has said the report is “speculation” and that plans to reduce its workforce are “not true.” It added that it will not set targets for worker dismissals and revealed it hired 2,000 employees in the first two months of this year to focus on software and new-energy vehicles.
A spokesperson from GM in China added reports about the SAIC-GM workforce being cut by 30% is “inaccurate.” VW China Group had also said it is not planning layoffs and reports about it cutting 10% of its staff is “incorrect.”
SAIC employed 207,000 people at its parent company and its major subsidiaries at the end of 2023. Reuters understands that SAIC rates its workers on a scale from A to D and that those with a D rating are being offered payouts to quit while those with C ratings are in “uncomfortable positions” and encouraged to hand in their resignations. Most of the SAIC-VW workers under threat are thought to be white-collar professionals. It is unclear if factory workers are among those staff at SAIC-GM that could get the axe.