(Yicai Global) Nov. 25 -- JD.com is carrying out a major reshuffle of senior management in its main retail business group and cutting top executive salaries across the board in order to improve efficiency at the Chinese e-commerce firm, online news outlet The Paper reported yesterday.

There has been a big shake up of president-level executives and some changes to vice-presidents in various business divisions under the retail group at the behest of founder Richard Liu, online financial news outlet Late Post also reported earlier the same day, citing an announcement made on Nov. 23. However, Xin Lijun remains chief executive officer of the group.

The retail group is splitting its most powerful business division, the computer, communication and consumer electronics and household appliances division, which accounts for almost 60 percent of its revenue, into two. One part will now be responsible for household appliance sales and consumer electronics, and the other for computers and communication.

JD.com will slash salaries of senior managers at and above the vice-director level by between 10 percent and 20 percent from Jan. 1 next year, Liu said in an internal circular on Nov. 22. The higher the position, the bigger the cut, he added. The funds will then be redistributed internally to improve benefits, including wages, for ordinary staff and boost liquidity, he added.

Liu stepped down as CEO earlier this year but is still chairman and his recent moves show that he has an absolute say in corporate affairs. He holds a 13.8 percent stake with 76.1 percent of voting rights, according to a document submitted to the Hong Kong stock exchange in April.

JD.com has been severely affected by the pandemic in the past two years and especially this year, Chief Executive Officer Xu Lei said at the earnings call. The Beijing-based e-retailer was unable to deliver to 17 percent of customers in September due to outbreaks of Covid-19 and as a result many orders were cancelled, he added.

"Even though many businesses are facing challenges, we do see a brighter future and there are obvious signs of recovery. The signs are very clear, but we are still not sure how fast the speed of the recovery will be," Xu said.

"From a management perspective, what we want to do is stick to our current strategies. We need to have a very clear view on our future direction, how the industry will change, how strong the momentum will be so as to know how to adjust the pace of investment," he added.

JD.com raked in net profit of CNY6 billion (USD838.1 million) in the third quarter, a big improvement on the CNY2.8 billion loss it made a year earlier, according to its latest earnings report published on Nov. 18. Revenue was up 11.4 percent to CNY243.5 billion (USD34 billion).

JD.com’s share price [HKG:9618] was trading down 0.8 percent at HKD198.30 (USD25) as of 1 p.m. China time. Earlier in the day it sank 3 percent to HKD194.50.

Editor: Kim Taylor