China Minmetals Says Under Pressure to Cut Staff Amid ReformsBloomberg News
Officials says seeking alternatives to reduce layoff pressure
Co. seeks to offer alternative positions, early retirment
China’s biggest metals trader and one the country’s largest state-owned enterprises said it’s under some pressure to cut jobs as the government seeks to slim down excess industrial capacity.
China Minmetals Corp. is limiting the pressure by seeking to find alternative jobs for any affected employees and offering them training or early-retirement, Vice President Li Fuli said on the sidelines of National People’s Congress meetings in Beijing on Sunday.
Li is one of the first senior executives from China’s state-owned enterprises to speak publicly about potential job cuts as China seeks to reform its bloated industrial complex without stoking social unrest. Commodities companies are particularly vulnerable as they’re confronted by the worst slump in prices in a generation following years or over-expansion.
“Financial difficulties within the metals and mining industry make the reallocation of workers a big headache,” said Helen Lau, an analyst at Argonaut Securities (Asia) Ltd. in Hong Kong. “Minmetals’ remarks show that it’s also facing problems even though it’s a huge SOE.”
About 1.3 million coal workers and 500,000 in the steel industry will be cut, Yin Weimin, human resources and social security minister, said last month. The government has set up a 100 billion yuan ($15.4 billion) fund to be spent over two years to help companies resettle workers.
China won’t see the sort of layoffs recorded in the last major round of state-owned enterprises reform in the 1990s under then-Prime Minister Zhu Rongji, Xiao Yaqing, the chairman of the State-Owned Assets Supervision and Administration Commission, told a briefing in Beijing on March 12.
“We’re under pressure to cut the inefficient capacity and to relocate the employees in the future but we will have many channels to allocate these employees,” Li said. “The State Council and local governments as well as enterprises will issue series of measures to support closures,” he said, without elaborating.
China Minmetals agreed to buy engineering company China Metallurgical Group last year, combining two state enterprises with about $82 billion in revenues in 2014. The deal was seen as part of the government’s overhaul of state enterprises and was followed by the re-organization of two shipping groups.
— With assistance by Keith Zhai, and Alfred Cang