BYD's North American headquarters in Los Angeles. (File photo/Xinhua)
Chinese automaker BYD has started a second round of layoffs and bonus cuts after a similar move last September, reports financial news site Caijing.
The company plans to lower staff bonuses from June to September to 15% from the original 33%, which is expected to reduce labor costs by 240 million yuan (US$37.7 million).
The company has to cut bonuses because of lost revenue due to the gloomy economy, according to BYD's internal announcement. The cost reduction of 240 million yuan (US$37.7 million) will be a considerable proportion compared to the net profit of 1.39 billion yuan (US$218 million) made by the company last year.
BYD's net profit came to 629 million yuan (US$98.8 million), down 70% from a year earlier, and the net profit in the first quarter only came to 27 million yuan (US$4 million), a 90% reduction compared to the same period of last year, according to the company's annual financial report.
The company said the decreasing buying power in car market has deeply affected the sales, only selling 11,000 cars in the first quarter, down 8% from a year earlier.
The market share of the company's own brand has been decreasing over the last several months. The number in 2011 decreased 10% compared with that in 2010, said the source.
Although the whole car market is still facing the uncertainty, BYD seems to be worse than others. The monthly sales of the company's S6 SUV dropped to 6,500 vehicles in May from the average 10,000 sets of last year, as the total SUV sales increased more than 50% during the same month overall in China.