Foreign firms sheds jobs in China: state media
Multinational companies are hiring less or cutting existing staff in China as they struggle through the global economic crisis, state media said on Friday.business Updated: Feb 20, 2009 11:23 IST
Multinational companies are hiring less or cutting existing staff in China as they struggle through the global economic crisis, state media said on Friday.
Nearly 70 per cent of firms polled in a survey by FESCO, a Beijing-based, state-run recruitment agency targeting foreign companies, said they were scaling back their recruitment plans this year, the China Daily reported.
In addition, 27 per cent said they had already started laying off employees, the survey found after polling 356 of its clients in different industries across China, the newspaper said.
According to a poll done by KingField Management, a head-hunting firm based in the southern city of Guangzhou, more than 44 per cent of the human resources managers surveyed said their companies had cut jobs.
A quarter said they had layoffs planned for this year, according the survey of 216 firms in China's industrial powerhouse of the Pearl River Delta region, half of which are multinationals, the China Daily said.
The situation is in stark contrast to the hiring spree seen in recent years. Multinationals are now either cutting overseas expenses to address cash flow problems at home or becoming cautious about investing further in China, it said.
Foreign direct investment in China fell to 7.54 billion dollars in January, down 32.67 per cent on year. In January 2008, foreign direct investment soared 109.8 per cent from a year earlier.
"Many of our clients are unable to sell their products as before and so they are not too keen on investing further in the Chinese market," said an unnamed executive at a European engineering and construction company.
"If they do not invest, we, who are largely reliant on their projects, cannot afford so many overheads. So we have to cut our cost base," said the executive, whose company is also shedding jobs, according to the report.
Charles Lee, of British job agency Antal International in Beijing, said multinationals were planning cut jobs to avoid bankruptcy during the crisis.
Others resorted to layoffs as part of an overall strategy to restructure operations, he said, according to the report.
"No one knows when the crisis will end, so no one exactly knows when the layoffs will cease," Lee said.
First Published: Feb 20, 2009 11:22 IST