Jingdong.com, which recently faced rumors of layoffs due to deteriorating profitability, suddenly announced a salary increase. Depending on the job category, annual salaries will increase by up to 100% starting next year.
On the 27th, Jingdong.com announced that from January 1st next year, the fixed annual salaries of frontline purchasing and sales employees will be increased by about 100%. The average salary increase rate for all retail-related employees exceeds 20%.
According to China’s First Financial Newspaper, this decision was made due to relatively strong live broadcast (Zhibo) sales performance during the recent Double 11 (a Chinese shopping discount festival around November 11th, also known as Guanggunjie). As of 23:59 on November 11th, the number of live broadcast viewers on Jingdong.com was estimated to exceed 380 million. According to the company, products such as the iPhone 15 series, VGN keyboards, and wireless microphones sold by Jingdong.com during the Double 11 period were sold out immediately upon release. However, the company has not disclosed the total sales for the entire Double 11 period.
Jingdong.com has adjusted employee salaries several times since last year. Starting January 1st this year, it announced a 10-20% salary cut for senior managers, with higher-ranking positions facing larger cuts. At the same time, outsourced employees were converted to headquarters staff and given benefits including five major social insurances and one housing fund benefit.
However, rumors of layoffs arose as Jingdong.com continued to lose ground to emerging competitor Pinduoduo. The rumors centered on Jingdong planning workforce reductions in logistics, technology, and retail sectors. Especially recently, Liu Changdong, founder and chairman of Jingdong.com, posted on the company intranet that "the organization is bloated and inefficient," which fueled the rumors. Nevertheless, the company later denied the layoff rumors as unfounded. The total number of Jingdong.com employees increased from 450,000 at the end of last year to 590,000 recently. In March, the company conducted layoffs over two weeks, receiving resignation requests from about 1,000 employees.
Meanwhile, Jingdong.com’s revenue for the third quarter of this year was 244.7 billion yuan (approximately 44.2515 trillion KRW), representing only a 1.7% increase year-on-year. During the same period, PDD Holdings, which operates Pinduoduo, saw a revenue growth rate of 94%. In October, Macquarie downgraded Jingdong’s Hong Kong stock investment rating to neutral and lowered the target price to 124 Hong Kong dollars (approximately 20,435 KRW). Morgan Stanley also lowered the target price for the group’s Jingdong.com American Depositary Receipts (ADR) to 33 dollars.
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