China firms cut staff on virus outbreak as Xi vows no large-scale layoffs

China firms cut staff on virus outbreak as Xi vows no large-scale layoffs
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SHANGHAI (Reuters) – A Chinese media company said it will lay off 500 employees due to the coronavirus outbreak, the latest among a string of firms to do so in the past two weeks as the epidemic takes a toll on small-to-medium sized businesses.

Xinchao Media, which places advertisements in elevators, will cut 10% of its workforce to “ensure survival”, the company said in a post on its official WeChat account on Monday, which carried the transcript of an internal speech by CEO Zhang Jixue.

“To overcome the epidemic, you have to step on the brakes, jam the cash flow, reduce costs,” Zhang said, as he noted the company’s cash reserve of 1 billion yuan ($143 million) would likely be enough for only 6-7 months in the absence of income.

The job cuts come even as President Xi Jinping said the government would prevent large-scale layoffs caused by the virus outbreak – which has killed more than a 1,000 people in mainland China and infected over 40,000.

Authorities said on Tuesday they will roll out measures to stabilize jobs.

But many companies are hurting from disruptions felt since late-January after local governments extended Lunar New Year holidays and urged people to stay home.

“It is possible that the coronavirus could result in two to three million lost jobs in the first quarter,” said Nie Wen, an analyst from financial firm Hwabao Trust.

Source: Reuters

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