State-owned Chinese automaker SAIC Motors may be planning to lay off a significant portion of its General Motors and Volkswagen joint-venture staff, in addition to employees at one of its electric vehicle units.
A new Reuters report claims that SAIC will conduct the layoffs over the course of 2024, based on conversations with two unnamed sources. Rather than directly terminating employees, the informants alleged the company would instead offer payouts to some underperforming workers and move others into “uncomfortable positions” to encourage their resignation.
The layoffs aim to reduce SAIC’s workforce at its General Motors joint venture by 30% and 10% at its Volkswagen unit, the two sources claimed, affecting thousands of employees. The company’s Rising Auto unit, one of two EV-focused SAIC divisions, would receive the largest reduction, losing 50% of its staff.
While all three organizations have denied the allegations, the cuts would follow a year of intense competition from foreign and domestic automakers in the firm’s home market. Tesla has sought to take advantage of the country’s rapidly expanding electric vehicle segment, whose growth has accelerated far faster than in the U.S. More than half of the company’s exports went to China in 2024.
Meanwhile, BYD, a privately owned Chinese hybrid and EV manufacturer, has also stepped up its game, releasing the only sub-$10,000 battery-powered car model in China this March. The impact of these efforts on SAIC was visible over the first two months of 2024 when the firm’s sales declined 16% year-over-year. While SAIC retains its position as China’s best-selling automaker, a title it has defended for nearly 20 years, BYD leads in its domestic hybrid and EV markets by a substantial margin.
