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Beijing-based e-commerce giant JD.com will slash the salaries of around 2,000 senior managers and executives to boost education and housing benefits for other employees. The announcement was made by the company's founder Richard Lio Qiangdong in an internal mail, the South China Morning Post (SCMP) reported.
The salaries have also been cut to reduce the financial pressure amid a slowing economy in China. The cuts will amount to 10-20 per cent of the salary and will be implemented from next year. The cuts will be steeper for higher-level executives.
JD's decision came a few days after Chinese President Xi Jinping reiterated "common focus" as the government's aim. The policy aims to redistribute China's wealth to the poor. According to the Wall Street Journal (WSJ), this has also underpinned many of Xi's policies including a clampdown on tech giants including Jack Ma's Ant Group.
Also, companies have recorded a slowdown in the rise of revenue. Apart from JD.com, Alibaba Group's revenue growth also showed a slowdown. The major factor behind this is low consumer demand due to strict lockdowns under the zero-Covid policy.
JD.com will expand its insurance coverage to over 100,000 workers at a logistics unit. Currently, the company has over 540,000 employees.
"The employee benefit plan is currently being promoted, with a focus on front-line staff," a spokesperson of the company said, as reported by WSJ.
Li's letter indicated that JD's profits are thinner than Tencent Holdings, Baidu and Alibaba Group.
"We should not forget our stakeholders, many of whom are regular people like us," he wrote.
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First Published: Thu, November 24 2022. 10:06 IST