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Billionaire JD.com founder Richard Liu slams underperforming employees as e-commerce giant faces increasing competition

Richard Liu Qiangdong, the billionaire founder of Chinese e-commerce giant JD.com, said the company is no place for unproductive workers and threatened to fire them amid growing competition in the country’s online shopping sector.

“(For people who) are poor performers and don’t work hard, the company will not tolerate them and will eliminate them,” the 51-year-old entrepreneur said in a video that has been circulating on social media and was widely reported by local authorities. media.

High performers shouldn’t have to work overtime, but average, hard-working employees can also be sure they won’t be fired, Liu added.

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The remarks, some of the sharpest in recent years, mark an escalation in the tone of the company’s CEO, who last year warned employees not to “lie flat” or sharp ping – a Chinese term meaning doing the minimum to survive.

They also stand in contrast to previous comments from Liu, who repeatedly emphasized the camaraderie in the company’s culture, calling employees “my brothers.”

The strong words come after the Beijing-based company made a series of changes to its work schedule and working time policies, including shortening its lunch break from two hours to one hour, and making extra efforts to prevent “buddy punching” – deadline describing According to people familiar with the matter, employees clock in for colleagues who are late or absent.

One JD.com executive, who declined to be named because he is not authorized to speak to the media, said the company hopes the changes will help correct sloppy management over the past few years.

There have been serious problems in some major business units and the latest efforts to instill discipline in employees are much needed, according to the person, who also stated that the company expects the changes to motivate employees and provide a fair environment for those willing to work to fight for better performances .

JD.com did not immediately respond to a request for comment on Tuesday.

On Monday, the company announced it would gradually increase annual severance pay for procurement employees from four months’ salary to eight months’ salary, with no upper limit on additional bonuses. The increases will take place in stages, starting from July 1.

This followed two rounds of pay increases in recent quarters, including an average 30 percent raise for front-line customer service workers and a doubling of salaries for procurement and sales workers.

According to Li Chengdong, head of think tank Dolphin, the carrot and stick approach reflects Liu’s concern about how to sustain growth in an increasingly competitive e-commerce landscape.

Employees sort packages at a JD.com distribution center in Beijing. Photo: AP Photo alt=Workers sort packages at a JD.com distribution center in Beijing. Photo: AP Photo>

“As a company matures, it may develop characteristics of a large company, such as having less motivated and productive employees,” Li said. “The company may be able to ignore these problems as long as it continues to grow, but given that competition is growing much faster these days, the company is trying to be more agile.”

However, changes in workers’ work schedules alone may not be enough to spur economic growth in the long run amid changing consumer preferences, Li added. As Chinese customers become more budget conscious in the face of a weak economy, JD.com’s high prices and services, once a hallmark of the brand, may become a liability.

To address this issue, JD.com has developed strategies to lower the prices of products sold on its platform using PDD Holdings, the operator of the Pinduoduo budget shopping app. These include a “10 billion yuan discount” campaign, as well as flash sales and free shipping on products starting at 9.9 yuan ($1.4).

Last week, JD.com reported better-than-expected 7% first-quarter sales growth, and retail revenue rose 6.8%. Sales of general goods increased by 8.6%, while sales of electronics and household appliances increased by 5.3%.

This article originally appeared on the South China Morning Post (SCMP), the most authoritative newspaper reporting on China and Asia for over a century. For more SCMP stories, visit the SCMP app or follow SCMP i on Facebook Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.

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