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HKET: 43 Percent of Chinese Companies Downsizing in the Next 12 Months

Hong Kong Economic Times (HKET), the leading financial daily in Hong Kong, recently reported that, according to a survey report released by the consulting firm AlixPartners, 17 percent of Chinese companies have already laid off employees and 43 percent plan to lay off employees or stop recruiting in the coming year. AlixPartners interviewed more than 600 CEOs and senior management staff of Chinese companies. The results show that, as the economic downturn and geopolitical crisis intensify, business leaders want to properly deal with these challenges. Around 72 percent of the respondents are very much concerned about the business environment continuously being disrupted. However, 87 percent said they do not know where to start. China’s overall supply chain, from logistics to production, is facing unprecedented disruption, covering a wide range of industries. About 38 percent of the business leaders said they are reinventing their business operation models. Almost 99 percent of them recognized that they will need to make changes in the next three years in response to numerous internal and external disruptions. In addition to the supply chain and energy issues, business leaders are most worried about the resistance to innovation and the speed of technological development. Inflation and supply chain pressures are making it difficult for companies to maintain and grow profit margins, and the challenges are increasing. Prioritization of operational superiority and collaboration across departments and business areas is key for businesses to succeed and emerge stronger in the age of disruption.

Source: HKET, March 27, 2023