JD Logistics could fail without salary cuts

JD Logistics could go out of business within two years unless it dramatically reduces costs, according to JD.com Chief Executive Richard Liu.

As part of the cost saving measures, delivery staff are to be paid per piece instead of having a basic salary. Even so the company needs to make savings in other areas of the business.

Liu’s comments come amidst increasing complains from the media and social media at the long hours and low pay that delivery staff experience.

JD Logistics made losses of RMB 2.3 billion ($343 million) in 2018 according to Liu. Internal orders within the company discounted, the losses would have been RMB 2.8 billion.

Since JD Logistics was spun off as an independent company, Liu says that it hasn’t managed to win as many third party orders as it might and instead relies on internal orders (ie from JD.com) for much of its business.

Liu concluded, “I believe each of JD.com’s delivery brothers doesn’t want the company to go bankrupt.”

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