Dark clouds loom over the horizon for jobs
Multinational companies, which had gone on a hiring spree a couple of years back, have started to slash payrolls and freeze hiring as they struggle to stay afloat in the financial maelstrom sweeping across the globe.
Employees at many multinational firms, the most sought after employers in the past, are being bombarded with news of layoffs globally from their headquarters.
According to a survey by FESCO, a Beijing-based recruitment services provider for multinational companies, nearly 70 percent of the firms it polled have said they would trim their recruitment requirements for this year, while 27 percent said they have already started laying off employees.
FESCO polled 356 of its clients spread across the country and engaged a wide range of industries for the survey.
Over 44 percent of the HR managers surveyed admitted that their companies have slashed jobs, while 25 percent of the companies polled said they have plans to cut jobs this year, according to a survey conducted by KingField Management, a Guangzhou-based recruitment and executive search firm.
KingField surveyed 216 companies based in South China’s Pearl River Delta region, half of which are multinational companies like Dupont and Bosch, according to Ren Ge, general manager, China operations, KingField.
Finance, telecommunications and IT industries were the hardest-hit industries, according to both the surveys.
Banks, insurers and asset managers worldwide had announced 325,000 job cuts since August 2007, when the credit crisis began to intensify, according to Thomson Reuters calculations until Feb 12.
The announced job cuts in technology and information technology firms worldwide have added up to 300,000 in late January, TechCrunch’s Layoff Tracker showed on Tuesday.
Some global companies have also begun to downsize staff at their China operations, but most of them are carrying out such plans cautiously, experts said.
According to the KingField survey, of the companies that have already axed jobs, 68 percent have only cut less than 10 percent of their workforce.
“It shows that a majority of the companies are treading cautiously on cutting jobs,” said Zeng Jiangtao, senior recruitment consultant, KingField.
Companies who have cut jobs or are considering such moves can be generally divided into two groups, said experts.
“The first category has firms like Citibank, Motorola, etc. who are actually impacted by the crisis and have no other choice other than to cut jobs to avoid bankruptcy,” said Charles Lee from the Beijing office of Antal International, a UK recruitment company.
“The other section are those who are restructuring operations due to the crisis and have resorted to layoffs as part of this strategy,” Lee said.
According to Zeng, most of the companies are charting layoff plans as a pre-emptive step to ward off recession.
“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. 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 an employee at a European engineering and construction company, which is slashing jobs.
“No one knows when the crisis will end, so no one exactly knows when the layoffs will cease,” said Antal’s Lee.
He also urged employees planning to change their jobs to think twice before taking the leap.
“Nothing beats a stable job in an economic crisis. Companies are trimming people to replace existing hires with newcomers who do not cost as much. Companies that have got the mandate from their headquarters to hire people would also be permitted to lay off employees,” Lee said.