China-owned SAIC plans to cut thousands of jobs from its joint ventures with General Motors (GM) and Volkswagen.
According to people familiar with the matter, the automaker plans to cut 30% of employees at SAIC-GM and 10% of workers at SAIC Volkswagen. The sources also claim that the company plans to lay off workers at its Rising Auto EV subsidiary.
Job losses are rare in state-owned companies in China. However, the electric vehicle price war might have contributed to SAIC’s decision to cut jobs. The staff reductions will not occur all at once. Instead, the company plans to lay off workers gradually throughout the year. Most job cuts will either be based on stricter performance standards or payouts to low-rated employees to voluntarily resign.
A SAIC spokesperson denied rumors about staff reductions to Reuters, stating they were “not true.” On the contrary, the company shared that it recruited 2,000 employees in the first two months of 2024. The new employees are focusing on software and new-energy vehicle development.
SAIC Motor reported robust sales in January and February. It reported a year-on-year growth of 56.5% in new energy vehicle retail sales. The proportion of sales from SAIC’s own brands exceeded 55% of the group’s total.
Low growth in the EV sector seems to be the running theme for 2024. Tesla is reportedly trimming production at Giga Shanghai, scaling back on working days, and reducing the production of Model 3 and Model Y vehicles.
EV automakers are trying to adjust by developing smaller and cheaper electric vehicles. However, it will take some time before the next generation of EVs hits the market.
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