Experts warn of mass layoffs if economy keeps slowing down
By Grace Ng China Correspondent In Beijing 14 May 2013
When Mr James Zhao, 23, read news reports last Friday claiming Renren, the “Facebook of China”, could be laying off three-quarters of the staff at its 3G technology department, his heart sank.
Having been unsuccessful in his job applications to several multinational tech firms, including mobile giant Motorola, he was hoping to have better luck with local companies like Renren.
“If even the local firms are cutting staff, then the hiring sentiment is getting from bad to worse,” Mr Zhao told The Straits Times. He will graduate next month with a master’s degree in software engineering from a university in Beijing.
One key reason for his employment woes is the record bumper crop of 6.99 million fresh graduates - 190,000 more than last year - who will enter the job market this year.
A sluggish economic recovery also dampens hiring prospects, with some state media calling 2013 “the worst employment year” for white-collar workers.
In the first three months of this year, when the economy grew a slower-than-expected 7.7 per cent, demand for workers fell by 3 per cent, or 163,000 people, in China’s 84 major cities from a year ago.
The hardest hit were the prosperous eastern provinces, according to data from the China Labour Resources Market Research Centre. This region, which houses many of China’s key export and manufacturing hubs, saw a 7.2 per cent drop in labour demand.
In Guangdong province, the hiring rate for fresh graduates at its major universities is currently 52.4 per cent, about 7 percentage points lower than last year.
The job trend this year “may even be worse” than in 2008 during the global financial crisis, the Information News reported yesterday, citing a spokesman for the provincial education bureau’s employment guidance centre.
Industrial output data for April, released yesterday, showed weaker-than-expected growth of 9.3 per cent. This prompted analysts like Renmin University labour expert Liu Yuanchun to warn that “if the economy continues to slow, the impact on employment in certain sectors will be more obvious”, with even mass layoffs.
Earlier this year, MNCs had already made headlines with a round of dismissals in China. In March, some 50 employees at HSBC’s life insurance unit staged a protest outside its offices after 22 workers and 138 agents were axed. Motorola’s Mobility Unit in China is currently undertaking the first of three rounds of job cuts that would shrink its workforce by 800 in total.
Some larger local firms reportedly received local government support to keep their staff numbers stable. This is in line with the Chinese government’s pledge last week to keep this year’s jobless rate at 4.6 per cent or less. It will create nine million urban jobs, the same number as last year, when the jobless rate was 4.1 per cent.
But there are signs that some local players are starting to buckle under pressure.
Loss-making Chery Automobile is said to be planning 9,000 job cuts, China Business News reported yesterday, citing unnamed company insiders. The company bled 191 million yuan (S$38.5 million) in losses in the first quarter.
Even here in Beijing, where white-collar jobs are traditionally more plentiful, Ms Zhang Mi, 25, has yet to land an offer as a teacher or a trainer despite submitting 60 job applications to schools and private firms since last October.
The social studies master’s degree holder has had only four interviews and her parents are “worried sick”.
“There are simply too many graduates this year. I will have to lower my expectations,” said Ms Zhang, who is seeking a 5,000 yuan starting salary.
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Job prospects grim for China’s 7m fresh graduates
Experts warn of mass layoffs if economy keeps slowing down
By Grace Ng China Correspondent In Beijing
14 May 2013
When Mr James Zhao, 23, read news reports last Friday claiming Renren, the “Facebook of China”, could be laying off three-quarters of the staff at its 3G technology department, his heart sank.
Having been unsuccessful in his job applications to several multinational tech firms, including mobile giant Motorola, he was hoping to have better luck with local companies like Renren.
“If even the local firms are cutting staff, then the hiring sentiment is getting from bad to worse,” Mr Zhao told The Straits Times. He will graduate next month with a master’s degree in software engineering from a university in Beijing.
One key reason for his employment woes is the record bumper crop of 6.99 million fresh graduates - 190,000 more than last year - who will enter the job market this year.
A sluggish economic recovery also dampens hiring prospects, with some state media calling 2013 “the worst employment year” for white-collar workers.
In the first three months of this year, when the economy grew a slower-than-expected 7.7 per cent, demand for workers fell by 3 per cent, or 163,000 people, in China’s 84 major cities from a year ago.
The hardest hit were the prosperous eastern provinces, according to data from the China Labour Resources Market Research Centre. This region, which houses many of China’s key export and manufacturing hubs, saw a 7.2 per cent drop in labour demand.
In Guangdong province, the hiring rate for fresh graduates at its major universities is currently 52.4 per cent, about 7 percentage points lower than last year.
The job trend this year “may even be worse” than in 2008 during the global financial crisis, the Information News reported yesterday, citing a spokesman for the provincial education bureau’s employment guidance centre.
Industrial output data for April, released yesterday, showed weaker-than-expected growth of 9.3 per cent. This prompted analysts like Renmin University labour expert Liu Yuanchun to warn that “if the economy continues to slow, the impact on employment in certain sectors will be more obvious”, with even mass layoffs.
Earlier this year, MNCs had already made headlines with a round of dismissals in China. In March, some 50 employees at HSBC’s life insurance unit staged a protest outside its offices after 22 workers and 138 agents were axed. Motorola’s Mobility Unit in China is currently undertaking the first of three rounds of job cuts that would shrink its workforce by 800 in total.
Some larger local firms reportedly received local government support to keep their staff numbers stable. This is in line with the Chinese government’s pledge last week to keep this year’s jobless rate at 4.6 per cent or less. It will create nine million urban jobs, the same number as last year, when the jobless rate was 4.1 per cent.
But there are signs that some local players are starting to buckle under pressure.
Loss-making Chery Automobile is said to be planning 9,000 job cuts, China Business News reported yesterday, citing unnamed company insiders. The company bled 191 million yuan (S$38.5 million) in losses in the first quarter.
Even here in Beijing, where white-collar jobs are traditionally more plentiful, Ms Zhang Mi, 25, has yet to land an offer as a teacher or a trainer despite submitting 60 job applications to schools and private firms since last October.
The social studies master’s degree holder has had only four interviews and her parents are “worried sick”.
“There are simply too many graduates this year. I will have to lower my expectations,” said Ms Zhang, who is seeking a 5,000 yuan starting salary.
Additional reporting by Lina Miao
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