Chinese e-commerce giant JD.com is about to undergo significant leadership reshuffling as founder Richard Liu reportedly plans to let go of underperforming executives.
According to mainland media Late Post, Liu delivered a three-hour-long speech to the mid-to senior-level managers on November 20 in a virtual meeting. He said that 10% of the top managers whose work was unsatisfactory would have to leave the company by the end of this year.
JD.com has also started restructuring its organization. According to Late Post, several divisions under JD Retail have been divided into two groups, including the computer, communication, and consumer electronic products segments.
The 3C home appliance division has also been split, which the outlet says has been the most successful and influential business group. JD Retail’s revenue accounted for roughly 60% of the firm’s total revenue in the third quarter of this year.
Liu urged meeting attendees to emphasize cost reduction, increasing efficiency, and providing excellent customer service. He believed the direction would help JD.com regain Chinese consumers’ interest.
An employee from the company told the South China Morning Post that Liu recognized JD.com’s retail business was falling behind other competitors, mainly because of pricing. However, the Chinese billionaire believed it would be the most crucial determinant to winning over the mainland market.
Chinese buyers have been much more cautious in spending as the country is amid an economic downturn. “Zero-COVID” policies, a real estate crisis, and a stock market slump have only worsened sentiment.
Before the Late Post report, Liu on November 22 announced executive wages would be reduced by 10% to 20%, with the greater cut going to higher positions. He said the fund from this move would be dedicated to employee benefits and assist the firms’ financial burdens.
JD.com’s latest adjustments reaffirm that the JD.com founder still holds decisive leadership at the company after passing the CEO baton to stalwart Xu Lei 累徐 in April this year. After multiple stock sales, Liu has only a 14% stake in his founding company. He, however, still owns 78% of the voting shares in JD.com, remaining a grip control over the corporation.