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Weilai was exposed to expand layoffs, the official response: false news

2024-04-17 Update From: AutoBeta NAV: AutoBeta > News >

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AutoBeta(AutoBeta.net)03/03 Report--

It was revealed that it would increase the proportion of layoffs after Li Bin, chairman of Xilai and CEO, issued a full letter in early November announcing that it would cut 10 per cent of its staff. In July, there were media reports that people familiar with the matter said that some departments in Xilai had been asked to prepare the list of layoffs and might increase the proportion of layoffs to 20% to 30%. In addition, some international expansion plans, including a foray into the US market, have also been delayed or suspended. The layoffs are mainly related to non-core businesses or businesses that cannot generate quick returns or require significant investment, while other more core businesses such as sales are still being recruited, the report said.

In response to the above report, Xilai Automobile responded to the interface news: "the increase in the proportion of layoffs is false, the company has no further layoffs plans, and will continue to make 'dynamic adjustments' in the markets in which it operates."

It is worth mentioning that in response to the comments that appeared on the Internet: "the adjustment of the payday of Weilai Automobile has been postponed by eight days, and thousands of people have been laid off," on December 1, the legal Department of Weilai issued a notice saying that a large number of false information about Weilai has been maliciously spread on the Internet, and many people have publicly clarified and apologized for spreading false information this week. The clarification shows that "the adjustment of the payday of Xilai Automobile has been postponed by eight days and thousands of layoffs" have been communicated by the staff of the company, which is not true.

In early November, Li Bin released an all-staff letter aimed at Lulai employees, announcing that he would cut about 10% of his jobs, and the specific adjustment would be completed in November, although Li Bin did not disclose the specific positions and areas of the layoffs at the time. At that time, Li Bin said in his letter that the company would ensure long-term investment in core key technologies, maintain the leading edge of technology and products, ensure that sales and service capabilities can cope with fierce market competition, ensure the timely listing of 9 core products of three brands, organize efficiency improvement, merge repetitive departments and posts, change inefficient internal work processes and division of labor, and abolish inefficient posts. Resource efficiency, postponement and reduction of project investment that will not improve the company's financial performance within 3 years.

According to statistics, by the end of 2022, there were 26763 employees in Lai, accounting for the highest proportion of the three car companies. For comparison, the ideal number of automobile employees is 19396; Xiaopeng automobile is 15829.

On the layoffs, Li Bin said in the "all-staff letter": "I am sorry that this adjustment will affect some colleagues, and please understand that this is a difficult decision that the company has to make in the face of fierce market competition." As for why Weilai laid off 10% of its staff? People in the industry believe that the layoffs of Weilai Automobile may be related to the sales volume of Weilai and the various pressures invested by various parties.

The latest financial data show that in the third quarter of this year, Weilai realized operating income of 19.07 billion yuan, an increase of 46.6 percent over the same period last year, of which automobile sales revenue was 17.41 billion yuan, up 45.9 percent over the same period last year; vehicle gross profit margin was 11.0 percent, down 5.4 percent from the same period last year; and a net loss of 4.56 billion yuan, an increase of 10.8 percent over the same period last year.

With regard to the financial report data, Weilai said that with the breakthrough in sales and revenue, a number of core indicators, including gross profit margin, which reflect the operating conditions of enterprises have been comprehensively improved. As of September 30, 2023, Fulai cash and cash equivalents were 45.2 billion yuan.

It should be noted that the distance between Weilai and other "competitors" is gradually widening. Data show that from January to November this year, Xilai delivered a total of 142026 vehicles, lagging behind the ideal car (325677), but ahead of Xiaopeng (121486).

On the same day, some domestic media reported that as part of realizing the company's profits, reducing costs and increasing efficiency, Xilai will spin off its battery manufacturing division as early as the end of the year, and will seek outside investors with a valuation to be determined. According to the spin-off plan, senior engineers from the battery department of Weilai will join the new company, and some employees will be merged into other departments of the company.

However, as of press time, the official of Xilai did not respond to the news.

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