Chinese online second-hand car selling platform Uxin has suspended an unknown number of its employees from work beginning March 1 due to “operational difficulties,” shortly after announcing pay cuts last week.
Why it matters: The novel coronavirus outbreak is yet another blow for the troubled Uxin, which has seen depressed share prices since its Nasdaq debut, particularly after allegations of fraud in its operations surfaced last year. Along with other online-to-offline verticals, China’s online used car sector is among the worst-hit sectors since the Covid-19 crisis took hold in mid-January.
- Uxin rivals including Guazi and Souche are also reportedly (in Chinese) implementing pay cuts and layoffs due to slow sales as a result of the epidemic.
Details: The Beijing-based company is temporarily suspending employees that it “can’t arrange work for” due to “operational difficulties,” according to Chinese media reports, citing a letter to employees made public on Monday.
- During the suspension, the company will continue to pay suspended staff the minimum salary required by local governments as well as make payments to social insurance and housing funds, according to the letter.
- The number of employees affected by the suspensions is unclear, and the company did not immediately respond to TechNode’s inquiries on Monday.
- Uxin says normal workload and salaries for the suspended employees will resume once its operations are back to normal.
- The news comes on the heels of the firm’s Feb. 28 announcement that it was slashing 20% to 40% of salaries for employees ranging from entry-level to management by May.
- The company has seen several key management resignations over the past year. Chief technology officer Qiu Hui, who has worked at the company since 2016, resigned on Feb. 28, the fifth high-level executive to depart since May. Others that have jumped ship include chief marketing officer Wang Xin, chief operating officer Peng Weilian, chief strategy officer Jing Wenbing, and Jing Yuan, a finance manager.
Context: Uxin raised $225 million in a downsized initial public offering on Nasdaq in June 2018. The company’s shares, now priced at $1.7 apiece, has traded under its offering price of $9 since its debut.