(Yicai Global) March 26 -- Chinese new-energy vehicle maker Nio, which harbors ambitions to compete with the likes of Tesla, has confirmed it will cut 3 percent of employees amid reports of inflated sales figures and mass lay-offs.
Nio will reduce employees by 3 percent to under 9,500 people, Beijing News reported founder and Chief Executive William Li as saying in an internal letter setting out the Shanghai-based firm's goals for this year.
The company rapidly expanded in 2018, opening sales outlets and offering inflated salaries to lure in new talent as its total workforce swelled by over 50 percent in the second half to reach at least 9,000 by the turn of the year. The company's development has been hampered this year after it revealed a net loss of USD1.4 billion for 2018 and shelved plans to open its own factory in the country.
Short-term losses are difficult to change at an operational level, Li said earlier. The most optimistic of outlooks suggests that Nio will not narrow losses significantly until it delivers its ES6 sports utility vehicle models in volume, the letter states.
For this year, the company aims to deliver models on time to customers in June, while improving efficiency in terms of its budget and investment and significantly boosting its gross profit margin, according to the letter. The firm also aims to bolster research and development planning for the second-generation of its platform as well as set up a test fleet for autonomous driving.
Nio produced 12,800 ES8 cars last year and delivered 11,300, according to its annual report.
Staff Forced to Buy Nio
Most Nio cars delivered last year were bought by its own staff, a person claiming to be a former employee said on social media last week. The company made its employees buy them through leasing agreements. The employee bought an ES8 for CNY460,000 (USD68,526) and the company pays him CNY15,000 back each month for a three-year period. Therefore, employees get a car and can make an extra CNY80,000 through the deals.
Other netizens accused Nio of falsifying sales data using internal purchases from suppliers and other partners, while also using financial products to gain private profits and laying off employees in secret.
Nio denied the claims in a statement on March 22. The firm has delivered 14,000 ES8s as of the end of February, and only 2 percent were bought by employees or shared with the firm, according to the statement. Nio has entered a period of refining of operations and will work to improve system efficiency while also adjusting and optimizing business and personnel structures in accordance with its development strategy, the company added.
NIO remains objective and calm towards questioning and criticism while its legal and public relations departments will take necessary measures to deal with malicious rumors, Li added.
Editor: William Clegg