Embattled Hong Kong cosmetics retailer Sa Sa axes 75 jobs, cuts salaries by up to 40 per cent
- Company says it ‘has been hit hard by the negative market environment’
- Sa Sa aims to save up to 30 per cent of its costs in the short term through these measures
Sa Sa International Holdings, Hong Kong’s biggest cosmetics retailer, said on Thursday it would cut its 2,500-strong work force in the city by 3 per cent and slash salaries by up to 40 per cent in the three months to May.
The announcement follows a 75 per cent cut in pay for the company’s executive directors for three months, which it revealed on February 6. Sa Sa aims to save up to 30 per cent of its costs in the short term through these measures.
“Sa Sa, like all of our peers in retail, has been hit hard by the negative market environment. We are taking a slew of measures to save costs,” the company said in a statement. “We hope all employees and everyone understands the difficulties Sa Sa is facing, and that we can tide over these difficult times together, and power through this dire situation.”
The company said its sales in Hong Kong plunged 77.9 per cent in the first week of the Lunar new year, amid the outbreak of Covid-19, which is caused by the coronavirus. When Macau is included, its sales slumped 76.9 per cent.
The outbreak is weighing on Hong Kong’s economy, which has already been battered by eight months of anti-government protests. Both have kept mainland Chinese tourists away from the city. The city’s gross domestic product shrank 1.2 per cent in 2019 – its first contraction in a decade. And Paul Chan Mo-po, the city’s Financial Secretary, writing in his blog on February 9, said the economy could slip further into recession this year.
Chan added that Hong Kong’s latest unemployment figures, to be released this month, are likely to show a year-on-year rise of 3.3 per cent for the fourth quarter.