(Yicai) May 17 -- Li Auto will likely save about CNY2.1 billion (USD291 million) in salary costs by laying off more than 18 percent of its employees, after the Chinese electric car startup's first-quarter deliveries fell short of expectations, according to a media report.

Over 5,600 workers will go based on Li Auto's 31,600 headcount at the end of last year, 21st Century Business Herald reported yesterday, citing insiders familiar with the matter. The Beijing-based firm paid staff more than CNY12.1 billion (USD1.7 billion) in wages in 2023.

Li Auto's sales and service operation departments will let go of over 400 employees, while the number of workers at its recruitment department will be cut to between 40 and 50 from more than 200. Its smart driving team will be downsized to less than 1,000.

The carmaker’s headcount surged 63 percent last year from 2022 as it became the first Chinese auto startup to report more than CNY100 billion in revenue and the third EV maker to make a profit after Tesla and BYD. 

Li Auto had net profit of over CNY11.8 billion, with a gross profit margin of 22 percent, on revenue of CNY123.9 billion (USD17.1 billion), its annual financial report showed. The firm delivered 376,000 vehicles last year.

In comparison, the workforces at peers Nio, Xpeng Motors, and Zeekr increased by 23 percent, 17 percent, and 28 percent, respectively. 

But Li Auto performed worse than expected in the first three months of this year. During an earnings conference call on Feb. 26, the firm predicted it would deliver 100,000 to 103,000 cars in the period, up 90 percent to 96 percent from a year ago. It later revised that to 76,000 to 78,000 units after orders fell short of expectations.

Editor: Martin Kadiev