Chinese Automaker SAIC Eyeing Layoffs At Joint Ventures With GM, Volkswagen: Report

Chinese carmaker SAIC Motor is reportedly looking to cut jobs in the thousands at its joint ventures with foreign automakers General Motors GM and Volkswagen VWAGY.

What Happened: SAIC, which is owned by the Chinese state, is looking to cut 30% of employees at its joint venture with GM, 10% of employees at its JV with Volkswagen, and more than half its employees at its Rising Auto EV brand, reported Reuters, citing two sources familiar with the matter. The layoffs are expected this year and will mostly be executed through the implementation of stricter performance standards and payout to employees who received lower performance ratings, the report added.

While the layoffs at SAIC-VW are expected to impact white-collar professionals over factory workers, it is not known whether factory workers will be included in the layoffs at SAIC-GM. At Rising Auto, the company will offer payouts to low-rated employees, while also dismissing some workers and not renewing the contracts of a few others, Reuters said.

The report noted that large-scale workforce reductions are rare at state-owned Chinese firms. However, competition is intensifying in the Chinese EV market with players like BYD Co Ltd and Tesla Inc taking the lion’s share.

SAIC did not immediately respond to Benzinga‘s request for comment on the report.

Why It Matters: Headquartered in Shanghai, SAIC features on the Fortune Global 500 list and sold over 5 million vehicles in 2023, including 1.1 million New Energy Vehicles (NEVs). In China, NEV refers to vehicles primarily powered by electricity, encompassing battery-electric vehicles (BEVs) and hybrid electric vehicles, among others.

From January to February this year, SAIC reported wholesale sales of 453,000 vehicles and retail sales of 736,000 vehicles. Retail sales of NEVs reached 155,000 with SAIC-GM delivering over 10,000 NEVs and SAIC Volkswagen delivering over 16,000 NEVs.

Check out more of Benzinga’s Future Of Mobility coverage by following this link.

Read More: Tesla CEO Elon Musk Draws Comparison Between Looi And Butter Robot From Rick And Morty