Gionee’s Dongguan factory announced a plan for job cuts by the end of April

Today, Gionee has issued a series of documents for the Dongguan staff, indicating that by the end of April the employment contract would be terminated completely. Gionee confirmed the news and then gave some statements where he assures that he will provide the corresponding monetary compensation to the workers according to the contract.

The document indicates that apart to the special conditions that pregnant and breastfeeding women will have, keeping their job, the rest of the employees will be part of the end of the contract, in order to finalize the operations in April. For those workers who do not want to terminate the contract, the company will implement its work suspension and rest policy.

At the end of last year, Gionee found itself involved in the rumors of multiple suppliers and the tension of the capital chain. In mid-January of this year, Sina Technology discovered that had participated in litigation with various suppliers in Shenzhen and Shanghai, and as a result, many of the shares held by Liu Lirong’s company were frozen by the bank. There are also press reports that many small and medium-sized suppliers had begun negotiations with Gionee in January 2018 to “get into debt,” and some manufacturers indicated that deadlines for debts had reached more of half a year.

By the end of January, Gionee’s CEO Lirong Liu responded to the scandal in an interview: “those are just market rumors”. He indicated that the main reason for Gionee’s capital chain problem is caused by excess of expenses in 2016 and 2017.

Regarding the capital chain problem, Liu Lirong indicated that Gionee’s problem would be solve in 3 steps. The first would be through the introduction of partners to ensure production and sales. The second step would be to introduce strategic investors and funds. Finally, he would sell fixed assets to pay the debts and obtain financial support.

According to the report of the Caijing magazine, employees of some departments of Gionee have received notifications of internal restructuring, which would be reorganized shortly, because Gionee will get the financing and funds to invest in a new company. However, the way in which the factory will be financed is still unknown.

Sina Technology previously knew that Gionee had issued a notice in late January this year for employees at some of its factories to stop working for one month. Under the agreement, the factory would restart operations on March 8. However, this document means that employees would not return to work, but would be dismissed.

The company told Sina Technology that the Dongguan factory employment adjustment would have been approved by to the Dongguan Labor Bureau, informing employees to terminate the employment contract and that the standard financial compensation would strictly follow the agreement in the established contract.