Key Takeaways:
Want Want China plans to cut about 1,000 jobs, with roughly 400 already laid off, after Chairman Cai Yanming flagged a "major operational crisis" in an internal letter.
A former employee familiar with the plan said the group aims to eliminate about 1,000 positions, with roughly 400 already cut. Another former employee said the department where he worked planned to optimize 8 percent of staff, meaning nearly 20 employees could face layoffs.
The company also asked employees to write self-evaluation reports for the first time, citing a substantial decline in net profit. Employees were told to reflect on five principles — knowing themselves, earnestly examining shortcomings, constantly reminding themselves, firmly grasping their work, and fully developing their abilities — though unit heads were exempt from the exercise.
Cai's internal letter, circulated in early August, said the company faced a "major operational crisis" and would eliminate cadres who made no contribution. The letter drew wide attention from the public and industry, according to Caixin. Want Want did not respond to requests for comment.
Shares of the Hong Kong-listed snack maker rose 1.7 percent, with short selling of $991,550. The layoffs mark the company's most aggressive cost-cutting since the chairman's warning, and investors will watch interim results to gauge the scale of the profit decline.
Want Want, known for its rice crackers and milk drinks, is among China's largest snack and beverage makers. The company faces pressure from shifting consumer preferences, including a move away from sugary drinks that has weighed on legacy food brands across the sector. Rivals in the broader food and beverage space have also trimmed costs as demand softens.
The cuts show management expects the profit slump to persist, pressuring the legacy snack maker as competition intensifies in China's food and beverage market. Want Want's interim results will provide the next read on margins and revenue.
This article is for informational purposes only and does not constitute investment advice.
