Tahoe axes Beijing, Shanghai staff as cash-flow stress hits Chinese developers
Thousands of the builder’s staff are being laid off, according to employees and media reports, as the government’s debt-reduction campaign bites
Tahoe Group is axing its staff in Beijing and Shanghai, according to employees and media reports, becoming the first major listed developer in China to do so as the property sector feels the pinch from liquidity stress.
The Shenzhen-listed builder has slashed most of its design staff in the two cities, as well as its branding staff in Fuzhou and Wuhan, according to employees and online media reports.
The scale of the lay-offs is still unclear. The earliest report by online news site Ifeng.com, on July 20, claimed that 30 per cent of staff are being sacked. But one employee in Tahoe’s design department in Beijing told the Post the figure could be as high as 80 per cent.
It is not surprising that some highly leveraged developers are cutting staff under the current circumstance. We’ll not be surprised to see more lay-offs
Whichever account is closer to the truth, the lay-offs will be huge because there are 15,300 people on Tahoe’s payroll, according to its 2017 financial results.
China’s property industry has been hit hard by the central government’s campaign to cut debt, which has squeezed banks’ off-balance-sheet lending.
According to the source in Tahoe’s design branch, who spoke on condition of anonymity, employees have been asked to take exams filled with “peculiar questions”, and those who fail have to leave. Those who pass are asked to take a second and then a third exam until they fail. The marking of the papers is not transparent, and the source said the list of those being shown the exit had already been decided.
Responding to the reports, Tahoe said in a statement that it is “upgrading” its workforce, recruiting new talent from top universities on a massive scale. When approached for more details, Tahoe referred the Post to the statement.