JD.com to slash executive salaries and raise lower-level pay
Chinese e-commerce giant JD.com plans to cut pay by up to 20% for senior executives, as an effort to better support its lower-paid staff and alleviate some of the stress on the company.
The decision was announced in an internal email by Richard Liu, founder of the company, on Tuesday.
More than 2,000 employees at the deputy director level and above will be affected by the pay cuts, with cash salaries slashed by 10% to 20%, starting January 1 next year.
“The most senior role will get the most cut,” Liu said in the email, “I hope the executives will understand and support this decision! I’m sorry for the more than 2,000 executive brothers, I apologize to you!”
According to the founder, JD.com will gradually offer benefits, including medical insurance to all rank-and-file employees, including more than 100,000 couriers at Deppon Logistics, a domestic delivery company that JD’s logistics arm bought in March.
More than 540,000 people are currently employed by JD.com, the vast majority of whom work in logistics. According to the company’s financial report, it spent a total of 31.4 billion yuan on the salaries of its logistics employees in the first three quarters of this year.
In the email, Liu promised that he will donate 100 million yuan personally to expand a company fund to provide help for dependents of employees who suffer major disability or loss of life.
“The employee benefits improvement plan is currently being promoted, with a focus on front-line staff,” a spokesperson from JD.com said.
In response to the authorities’ Common Prosperity campaign, big enterprises, especially food delivery platforms and logistics companies, have focused on improving workers’ welfare by providing basic social and medical insurance.
After experiencing record-low sales growth of 5.44% for the June quarter, partly due to COVID-19 prevention and control, JD’s net revenue for the July-September quarter came in at 243.5 billion yuan ($34.2 billion), an increase of 11.4% on the year.