Li Auto Denies Layoff Rumors

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(Source: Li Auto)

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Rumors have emerged recently on Chinese social media that Li Xiang, the founder and CEO of Beijing-based electric vehicle firm Li Auto, is planning major staff cuts during the second quarter of this year. The layoffs reportedly involve several departments, such as products and enterprise systems, and it is estimated that about 15% of employees will lose their jobs.

Leakers said Li Auto was taking stock of labor costs and working hours. From May, the company will apparently begin sorting staff working hours from high to low, and adopt a “last-one-out” system. The company’s 2021 financial report suggests it had employees with salaries totaling 3.48 billion yuan ($547 million). By a rough calculation, the downsizing involves nearly 1,800 staff, and will reduce the expenditure on salary by about 500 million yuan.

On Friday, a spokesperson of Li Auto told Chinese press that there is “no such plan, (the layoffs are) false news.”

Chengdu Business News reported that in autumn of 2021, Li Auto recruited new staff in over 80 Chinese cities, involving R&D, supply chain, manufacturing, intelligence and information technology, intelligent driving, marketing, management, finance, legal affairs, human resources and so on.

SEE ALSO: Li Auto to Raise Price of Premium Electric SUV by $1,851

In terms of revenue, in Q4, 2021, the firm earned 10.62 billion yuan, a year-on-year increase of 156.1%. Its net profit reached 295.5 million yuan ($46.4 million), a year-on-year increase of 174.9%. Meanwhile, the operating cash flow was 3.84 billion yuan, up by 110.7% compared with 1.82 billion yuan in Q4 2020.

In March 2022, Li Auto delivered 11,034 ONE models, up by 125.2% compared with March 2021. In Q1, 2022, it delivered 31,716 autos, up 152.1% year-on-year. Li Auto has delivered a total of 155,804 ONE models.

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