Chinese giant HNA to axe 100,000 jobs, quarter of its workforce, says report
Private conglomerate planning the cuts this year amid a liquidity squeeze, Risk Event-Driven and Distressed Intelligence has reported, citing five unidentified sources
HNA Group, the Chinese private conglomerate, is planning to cut 100,000 jobs or about a quarter of its global workforce this year amid a liquidity squeeze, Risk Event-Driven and Distressed Intelligence (REDD), the emerging markets news website, has reported, citing five unidentified sources.
Job cuts of that scale would rank among the biggest ever for any single company.
The heavily indebted Chinese giant plans to eliminate jobs in areas such as human resources, business operations and asset restructuring, REDD reported, citing the people.
The axe will also fall on units that HNA is planning to sell and the group has informed staff at its home base of Haikou, Hainan province, about the reduction plan, according to the report.
Employees at HNA’s aviation arm could be spared, as the business has been recruiting, REDD reported. A representative at HNA could not immediately comment.
Financial pressure has been intensifying on HNA after it spent tens of billions of dollars to snap up global assets from Manhattan buildings to hotels.
The group has reversed its overseas shopping spree and has been focusing on selling assets in recent months to repay debts.
HNA told creditors it was facing a potential shortfall of at least 15 billion yuan (US$2.3 billion) in its ability to repay debt in the first quarter, sources with knowledge of the matter said.
It is the first time such details of the group’s financial squeeze have emerged, illustrating the extent and urgency of the liquidity challenges that HNA is facing.
In February, HNA announced a US$2 billion deal for two land parcels in Hong Kong and offloaded part of its stake in Deutsche Bank.
HNA Group chairman Chen Feng said that liquidity problem exists “because we made a big number of mergers”, even as the external environment became more challenging and China’s economy “transitioned from rapid to moderate growth”, impacting the group’s access to new financing, Reuters reported in January.
HNA, among other high-profile overseas assets acquirers, has been falling under tougher government scrutiny on “irrational” overseas buying.
In June 2017, HNA, together with Wanda, Fosun International, Anbang Insurance Group, and east China’s Zhejiang-based Rossoneri Sport Investment – the vehicle used by mainland businessman Li Yonghong to acquire Italian soccer club AC Milan in April 2017 – have been singled out for scrutiny by local banks, following a directive from the banking regulator, according to emails seen by the South China Morning Post.
Additional reporting by Maggie Zhang, in Shanghai