Anger rise after BYD’s harsh layoff
About 300 retrenched BYD employees have signed up, and elected representatives, and hire a lawyer to defend their rights. Today some protesters were beaten by the security guards, and got hurt. The workers, escorted by colleagues were sent to hospital. The actual situation is still need to be confirmed. Some were stuck on the ground and could not move. They were then carried away by ambulance.
BYD Sales employees protested against BYD’s harsh layoffs and demand compensation.
According to news from weibo, around fifty laid off BYD sales workers openly protested in front of BYD’s office building in PingShan Industrial Zone, Shenzhen. They blamed that BYD for forcing them to quit their job by shifting them to work in other unrelated work positions in other division. The protesters were violently bitten up by a group of security guards and their banners were seized. In the conflict, some workers were injured and sent to hospital.
One protest worker said, “We are just to fight against unreasonable layoffs. The security guards tried to confiscate our banners, and we refused to give in. They then started to attack us. Three to four of our colleagues were hurt and some of our mobile phones, and cameras were broken by the security guards.
One worker representative said that their action will continue and fight for their compensation.
Figure 1：BYD protesters rounded up by many security guards
Figure2: One worker pushed to the ground and he was sent to hospital by colleagues.
The articles below are showing more details of BYD’s layoff.
BYD Plans Layoffs in China
By Jin Jing, Correspondent | Published Sep 2, 2011
Just the Facts:
- BYD reportedly is preparing to lay off employees at its auto sales unit after its sales have plunged this year amid heated market competition in China.
- Numerous Chinese automakers reported slower vehicle sales after the central government ended purchase incentives earlier this year.
- Some of the company's "new energy" models such as the F3DM plug-in hybrid and E6 electric crossover also have failed to generate much revenue due to limited sales.
SHENZHEN, China — BYD reportedly is preparing to lay off employees at its auto sales unit after its sales have plunged this year amid heated market competition in China.
The battery and car manufacturer, backed by U.S. billionaire Warren Buffett, plans to lay off up to 2,600 employees at the sales unit, according to a post from an unidentified laid off employee on the Chinese microblog site weibo.com.
Initially, about 1,000 employees will lose their jobs. Some sales teams have been dismissed, with staff members being transferred to assembly plants, and the job cuts may also affect other departments, the post said.
BYD this week admitted there is a personnel transfer underway, but described it as "normal activity" to improve service and enhance efficiency.
BYD was among Chinese automakers that reported slower vehicle sales after the central government ended purchase incentives earlier this year and General Motors and Volkswagen expanded their local presence with price-competitive entry-level models.
BYD's "new energy" models such as the F3DM plug-in hybrid and E6 electric crossover also have failed to generate much revenue due to limited sales.
"BYD has been quite aggressive on production expansion and employee hiring," said independent analyst Zhong Shi. "But the sales drop and profit slump have brought more pressure, so job cuts are inevitable."
Shenzhen-based BYD saw its profit fall 89 percent to $43 million in the first half of this year as the company's automotive business has declined. BYD car sales in the first six months slid 23 percent year-on-year to 220,131 units as demand waned for its mainstream compacts, the F3 sedan and F0 hatchback.
BYD Chairman Wang Chuanfu has said he is confident that second-half sales will pick up after the midsize G6 sedan is launched and production of S6 crossover vehicles is increased.
Inside Line says: Last year, BYD boosted sales by 15.5 percent to 520,000 units, missing a target of 600,000 units (and earlier projection of 800,000 units). The carmaker aims to sell 550,000-570,000 units this year.
BYD employees file class action suit over layoffs
China.org.cn, September 16, 2011
About 300 employees of BYD Co. have signed onto a class-action lawsuit against the automaker over recent layoffs, Yangcheng Evening News reported Friday.
BYD, the Chinese battery and auto maker backed by billionaire Warren Buffett, recently started to "redeploy" employees in its auto sales unit. However, rumors have been circulating that the "redeployment" strategy is just a cover-up for the company's layoff moves.
BYD has been avoiding using terms like "layoff" in its official statements and the personnel redeployment will not be limited to the auto sales unit, Caixin Magazine quoted a BYD employee as saying.
However, according to Yangcheng Evening News, BYD chairman Wang Chuanfu confirmed the recent layoffs at a temporary shareholders meeting on September 9. Executives at BYD's auto sales company continued to deny the layoff rumors.
BYD employees involved in the "personnel deployment" have called on their co-workers to petition to protect their rights. "Based on our preliminary statistics, over 200 people have signed up," said one BYD employee. 20 employee representatives have already joined a class-action lawsuit, the report said.
In the first half of this year, BYD sold 220,000 cars, down 23.4 percent year-on-year. As a result, its net profits dropped 88.6 percent to 275 million yuan.
China's business press carried the story above on Friday.
Additional large-scale layoffs planned at BYD
Mexy Cheng and Staff Reporter
BYD chairman Wang Chuanfu has frequently touted a large staff as one of his company's strong points, but low profits are now giving way to layoffs. (File Photo/Xinhua)
Chinese battery and car maker BYD is reportedly planning layoffs of about 7,000 employees at its information technology, new energy and home appliance divisions after laying off 70% of the staff at its auto sales unit in August. BYD's second massive layoff plan has again shocked the automobile industry, according to China Business Journal.
In late August, BYD reduced the workforce at its auto sales unit from 2,200 to 880 employees. It now plans to readjust its personnel structure in four additional divisions by cutting staff from 17,000 to 10,000. The plan aims to significantly reduce the company's costs as it experiences sharp declines in sales and profits.
BYD founder Wang Chuanfu has frequently hailed his company's large number of employees. He previously told reporters that BYD became a large enterprise mainly due to its 100,000-member workforce and its 10,000-member engineering team.
However, this caused a dramatic increase in personnel costs and impacted on its low-price sales model, the report said, noting that it is undeniable that the layoff plan, if implemented, would caused an even larger crisis for the company.
BYD's share prices fell significantly after the previous round of layoffs, dropping from 33 yuan (US$5.17) to 19.32 yuan (US$3.02), close to its issuance price of 18 yuan (US$2.82).
Profits have also fallen. According to BYD's biannual report, released on Aug. 23, its revenues in the first half of this year were 22.55 billion yuan (US$3.53 billion), a decline of 10.77% year-on-year. For the time being, BYD owes 16 billion yuan (US$2.5 billion) in short-term bonds and loans and has 15 billion yuan (US$2.35 billion) in long-term loans.
Under enormous financial pressure, BYD has been seeking funds via various channels. On Sept. 9, the company issued corporate debt worth 6 billion yuan (US$939 million) with terms of less than 10 years.
An industry analyst said that given BYD's dwindling business and future rounds of layoffs, it was not a good time to issue corporate debt since investors are likely to ask for higher returns on investments, increasing the cost of raising funds. This could eat into its profits, the analyst noted.
The layoffs are not the only problem facing BYD. The company, along with UBS Securities China, which had endorsed BYD's finances and acted as underwriter of the company's initial public offering (IPO) plan, has come under heavy criticism for deceiving investors since BYD began trading on the domestic A-share market on June 30 and without disclosing information about profits and layoff plans prior to listing.
BYD's grim biannual financial report was not released until after the company's listing. Some market experts even suspect that BYD's report of a sudden downturn in business was a collusion between the auto maker and UBS. Some media reports suggest that UBS Securities China had improperly enhanced the company's financial reports.
In a rebuttal, BYD said that a decline in business is normal during the initial development of a company. Also, UBS Securities China responded that it would fulfill its legal responsibility as an endorser and underwriter.