Now-private Li & Fung has started slashing as much as 70 percent of its Hong Kong-based procurement staff.
Since last week, the once-leading sourcing giant has been distributing dismissal notices that could affect hundreds of employees, according to a report in AA Stocks. Layoffs are also rumored to be underway in its Shanghai and Shenzhen offices, though details of how many might be impacted aren’t yet clear.
“People familiar with the matter assumed that the group would like to outsource the procedure to mainland China to streamline cost,” AA Stocks reported, adding that Li & Fung may have alluded to the staff adjustments coming as a result of the pandemic.
Li & Fung could not be immediately reached for comment on the job cuts.
Last week, the sourcing and logistics company officially went private, its shares delisted from the Hong Kong Stock Exchange on May 27, finally closing at 1.24 HKD ($0.16)—a 94 percent value loss from a peak performance period in 2011. While the Fung family still maintains a controlling 60 percent share of the company, the rest now lies in the hands of Singapore-headquartered global logistics warehouse operator and investor GLP.
“Today marks the start of a new journey for Li & Fung as we focus on achieving a fundamental transformation of our business,” Group CEO Spencer Fung said last Wednesday. “While there will be challenges to manage, Li & Fung will benefit greatly from our partnership with GLP.”