Layoffs trigger panic among Chinese multinational employees; Last year, many multinational employees became eager to change jobs due to worries of being laid off, which was very rare in the past

Layoffs trigger panic among Chinese multinational employees

SHANGHAI, March 28 (Xinhua) — Chinese employees of multinationals are finding their jobs no longer secure and enviable as a massive round of layoffs has hit such companies.HSBC Life Insurance Co. fired 22 staff and 138 insurance agents working for its life insurance joint venture inShanghai on March 20. The move has sparked fears among other multinational employees that they couldlikewise lose their jobs overnight.

The company dismissed its entire sales force as it decided to approach the market in a different way, ShellieZhang, a Shanghai-based spokeswoman, told Xinhua.

Her words apparently proved scant consolation to those out of work, as 50 members of HSBC staff staged aprotest at the firm’s Shanghai office on the day of the layoffs.

HSBC CEO Stuart Gulliver has closed or sold 47 businesses since taking the top job in 2011. He is focusingon markets where the company is most profitable, according to a bank statement.

HSBC’s China insurance venture, which was set up in June 2009 in Shanghai, suffered 146.3 million yuan(about 23.6 million U.S. dollars) in losses in 2011, 20 percent more than in 2010, notes the latest annualreport on its website.


The protesters told Xinhua they were staggered to lose their livelihoods so suddenly.

“I chose the job because of HSBC’s international background, which I thought may give me a bright future, atleast a stable career,” said Huang Lulu, who graduated from a university in Canada with multiple job offersthree years ago.

HSBC Life Insurance Co. said in a statement that it will help all the laid-off staff to find new positions.

“I believe what they promise on this issue, but this has knocked my confidence in multinationals,” said Huang.

For many years, employment with a multinational was taken by Chinese graduates to mean higher salaries,CV building and no redundancy worries.

In 2012, however, Nokia and Motorola started a round of layoffs in China, with over 1,000 losing jobs. Othersimilar companies have also taken the same measures during the world economic downturn.

Last year, many multinational employees became eager to change jobs due to worries of being laid off, whichwas very rare in the past, according to Zhang Mei, manager of the Chinese venture of the Manpower Group, aU.S. human resources (HR) agency.

“Chinese people used to believe that layoffs generally only happen to workers with poorer educationbackgrounds. But now, people have started to realize that everyone in a company can get sacked,” said HaoJian, a consultant with Zhilian, a local HR service provider.


Another increasingly common experience for Chinese employed by multinationals is being placed onindefinite unpaid leave until business picks up. It is understandable for many in this situation to lose patienceand resign.

Fang Qiang, a former machine operator for iPad in south China’s Guangdong Province, quit his job before theChinese Lunar New Year in February after a four-month period of leave.

“I didn’t know when I would go back to work, neither did the factory. So I quit,” he told Xinhua at a job fair inShanghai in late February.

“Some employers are suffering hard times right now, but they are waiting for new orders so that business willreturn in the near future,” explained Zhilian’s Hao Jian.

A former engineer with a local crane manufacturer said at the job fair that he “had to quit the job” because hewas paid just 1,450 yuan over the Lunar New Year holiday month.

“Some of my colleagues chose to take some training, waiting for returns to their positions,” the man,surnamed Liu, added.


Zeng Xiangquan, dean of School of Labor and Human Resources of the Renmin University of China, warnedthat “a possible domino effect of layoff may fall on migrant workers and university diploma holders as well.”

Some laid-off multinational white-collar workers may compete for jobs with new university graduates. As aresult, the graduates may in turn fight for work designed for migrant workers, according to Zeng.

China is undergoing an economic transformation that needs high-tech innovative talents, said Chen Zhao, aprofessor with Fudan University. Millions of workers were laid off during the last comparable process in Chinaduring 1998-2001, with massive emergence of private-owned firms competing for market share with state-owned manufacturers.

The layoff wave hit seven to nine million people per year from 1998 to 2001, according to the Year Book ofChinese Labor Statistics.

A big group of the workers fired at that time are still living on meager incomes and are known as “4050” asmost were born in the 1940s and 1950s.

“If some white-collar workers continue their routine work without picking up more skills and qualifications, theymay be the next generation of ‘4050’ as they are not young enough to start from the very beginning,” said FengLijuan, head consultant with, a local job hunting website.

It’s time for attention to be paid to the white-collar status quo and the government should provide training andpsychological aid to these workers, urged Zhang Libin, director of the labor market department at the LaborScience Research Institute under China’s Ministry of Human Resources and Social Security.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: