Uxin Ltd., one of the largest players in China for buying and selling used cars, has started suspending employees and cutting salaries to cope with operational issues stemming from the coronavirus crisis, local media outlet The Paper reported.
Uxin notified its employees in an internal letter that they will be suspended from work from March 1 due to operational difficulties. Affected workers will receive the minimum wage based on the local laws in their jurisdiction of employment and will return to work after the company’s situation recovers, the letter indicated.
Those not suspended from work will receive a 20 to 40% salary cut until May. Specifically, lower-level employees’ salaries will be slashed about 20 to 30%, while senior management will take a pay cut of over 40%, the company said.
Founded in 2011, Uxin combines an online platform that enables sellers to display cars and reach customers with over 1,300 service centers, which feature services like inspections, title transfers in-person consultation and after-sale services, throughout China, according to the company’s website. Uxin was listed on Nasdaq in June 2018 and trades under the code UXIN.
The announcement is just the latest in a series of difficulties for the firm. Qiu Hui, the company’s chief technology officer since 2014, has resigned from the company on February 28 making hers the fifth high-level executive departure since 2019, according to a 36Kr report.
The reason for Qiu’s leave was not specified, and she will remain a consultant for Uxin Group, the company told 36Kr.
The used car sector in China has been badly hurt by the coronavirus outbreak, as people are reluctant to visit brick-and-mortar stores to purchase secondhand vehicles. As of February 24, only 39.1% of used car dealers in China have resumed operations, according to The Paper, citing data from China Automobile Dealers Association.
Facing such difficulties, other secondhand dealers are taking actions similar to Uxin’s to tackle the crisis. Beijing-based Chehaoduo Group, best known for its used car platform Guazi.com, announced a temporary 30 to 50% cut to their employees’ salaries in February and March, local tech media outlet Sina Tech News reported on February 28.
36Kr is KrASIA’s parent company.