China's small and medium businesses say they will slash 30 percent of their workforce due to disruptison from the coronavirus epidemic, an association representing these businesses said today, the Communist Party publication, the Global Times reports.
"Contrary to a temporary labor shortage, mass layoffs may take place in a month or two. Some companies that can't restart operations may have already laid off staff," Zhou Dewen, deputy director of the China Association of Small and Medium Enterprises, said.
Among more than 10 calls he received from managers of SMEs, Zhou said, a majority have admitted to cutting payrolls and some are even prepared to declare bankruptcy, if employees seek arbitration.
"With smaller scale, more tight cash flow, many SMEs are more vulnerable to risks compared with large enterprises," Zhou said, noting that some SMEs said they welcome these employees to rejoin after the company endures this difficult period.
Hong Kong-registered Capital Estate said Wednesday its Fortuna Hotel Foshan in South China's Guangdong Province has halted operations at the end of January and will continue to suspend work.
Citing uncertainty over the suspension period, the company said it will gradually lay off 250 employees, accounting for about 90 percent of Fortuna Hotel Foshan, to reduce cash outflow that yields no returns. Those layoffs will be compensated according to local laws, it said.
Chinese authorities have rolled out measures to stabilize employment. The State Council, decided on Tuesday that China would scrap or reduce corporate contributions to employee endowment, medical and unemployment insurance for a certain period.
At the end of 2018, the number of medium-sized, small and micro enterprises grew by 115 percent from 2013 to 18.07 million, making up 99.8 percent of all legal entities, according to a report on China's fourth economic census released by the National Bureau of Statistics, China Daily has reported.-Photo: China Daily
