June 17, 2014 7:00 pm JST

Haier to axe 10,000 jobs this year

TETSUYA ABE, Nikkei staff writer

BEIJING -- Major Chinese consumer electronics maker Haier Group plans to cut 10,000 jobs, or about 14% of its 70,000-strong workforce, by the end of this year, it was learned on Monday.

     The 10,000 jobs will be chopped mainly at Haier's factories. The Shandong Province-based company will promote the automation of production lines and make its operations more efficient.

     Haier's move is the latest of a recent spate of job cuts implemented by Chinese consumer electronics manufacturers amid a slowdown in the pace of growth in the local market.

     A Haier spokesperson disclosed the plan to trim 10,000 jobs. Haier CEO Zhang Ruimin also said on a microblogging site and elsewhere that the company will carry out a restructuring program.

     The cuts will affect mainly semi-skilled workers at the company's refrigerator, TV and other factories. The workers will be replaced with industrial robots.

     Last year also saw Haier cut about 16,000 jobs, or 18% of its workforce at the time, mostly at its refrigerator, washing machine and other white goods division, resulting in the workforce shrinking from 86,000 to 70,000.

     Haier will further streamline its operations through the additional large-scale job cuts this year.

     Haier's move comes at a time when growth in the Chinese consumer electronics market is slowing.

     According to China's National Bureau of Statistics, consumer electronics retail sales rose at a lackluster year-on-year pace of 7.3% in the first five months of this year, compared with an annual growth rate of 14.5% registered in 2013.

     Haier is also facing increasingly tough competition from new rivals in the Chinese consumer electronics market, with Beijing-based major smartphone maker Xiaomi breaking into the flat-panel TV business.

     Some other major Chinese electronics makers are also cutting back on their workforces.

     Midea Group, a Guangdong Province-based manufacturer of air conditioners and refrigerators, plans to reduce its workforce by a total of 25,000 by 2015, compared with the 2011 level. The company plans to promote the introduction of robots, mainly at its air conditioner division, to further streamline its operations.

     BOE Technology Group, a Beijing-based major LCD panel maker, and Foxconn Technology Group, which produces products for U.S.-based Apple, have also stopped recruiting new workers at some of their factories. They plan to promote the automation of their factories to make up for labor shortages.