JD.Com, Inc (NASDAQ: JD) slashed salaries for about 2,000 managers by 10% – 20% and diverted some of those savings toward a $1.4 billion employee benefits fund, aligning China’s No. 2 online retailer with Xi Jinping’s “common prosperity” campaign to share the wealth.
JD.com founder Richard Liu will donate 100 million yuan ($14 million) of his own money toward staff welfare, Bloomberg reports.
The Alibaba Group Holding Ltd (NYSE: BABA) rival will also set up a 10 billion yuan fund to provide staff with interest-free home loans.
Also Read: Alibaba Rival Clocks Over 11% Revenue Growth In Q3 Backed By Rural SMEs
“The employee benefits plan is currently being improved, with a focus on front-line staff,” Reuters reported. The company has 540,000 employees.
Beyond JD, senior executives across China’s $58 trillion financial system also faced additional pay cuts as firms from investment banks to mutual funds weigh options to comply with Xi’s mantra.
“I hope this move can realize the dream of securing a house for all employees who have worked for more than five years, including for our courier and customer service brothers,” Liu announced in an internal memo.
Liu stepped down this year as JD’s CEO, joining China’s tech tycoon exodus after the internet crackdown to focus on longer-term strategies while mentoring younger management.
He would also contribute to the revitalization of rural China, a priority of Xi’s.
Last year, Alibaba and Tencent Holding Ltd (OTC: TCEHY) pledged to spend billions to support the effort. At the same time, state-owned investment banks have implemented pay cuts and delayed bonus payments this year.
Price Action: JD shares closed lower by 1.58% at $51.67 on the last check Tuesday.
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Source: https://finance.yahoo.com/news/jd-com-goes-aggressive-chinas-181605766.html