China’s Banking Industry Implements Layoffs and Salary Cuts to “Squeeze in Food and Clothing”
In a bid to tighten their belts and cut costs, China’s banking industry is resorting to layoffs and salary cuts, according to recent reports from various media outlets.
Lu media reported that the Industrial and Commercial Bank of China (ICBC) has laid off the most employees, with more than 8,000 people losing their jobs in 2023. The Agricultural Bank of China is also a major player in the layoffs, as they have cut 45,700 employees since 2016.
Furthermore, Chinese media outlet China Business News highlighted that banks are now considering layoffs and salary cuts as a realistic option to “cut back on food and clothing.”
The situation is dire for many bankers as not only are there no hopes of a salary increase, but they may also face clawbacks on their performance-based bonuses. Several banks, including China Merchants Bank and Bank of China, have reported deductions in performance-based salary claims in their annual reports.
Hong Kong’s South China Morning Post revealed that China’s most dynamic banks saw the largest salary cuts last year, with Bohai Bank reporting a pay cut of 11.8% per employee.
In addition, senior management teams at major banks like ICBC, China Construction Bank, and Postal Savings Bank also saw reductions in their salaries last year. For instance, ICBC executives experienced a drop of about 2.04 million yuan in their overall salary.
The situation is particularly challenging for employees, with one Guangzhou-based banker stating that the ratio of actual wages to payable wages is around 60%. Many employees, including managers at banks like China Merchants Bank and China CITIC Bank, have seen salary cuts of over 60%.
Overall, the banking industry in China is facing significant challenges, with layoffs and salary cuts becoming a harsh reality for many employees. As the industry grapples with these tough decisions, there is a growing sense of uncertainty and concern among workers about their financial future.
This article was produced by Voice of Hope and serves as a comprehensive report on the current state of China’s banking industry.