The Covid epidemic, rising raw material costs, and untimely parts deliveries have severely impacted WM Motor's production and operations, said WM Motor's CEO.
After rumors surfaced a month ago that WM Motor would give its employees a pay cut, the latest internal letter confirms this.
WM Motor CEO Shen Hui listed initiatives to ease the financial pressure in a November 21 internal letter to all employees, including a 50 percent pay cut for management at the M4 level and above, and a 30 percent pay cut for regular employees, according to a Monday report on ifeng.com.
WM Motor's payroll for employees will be adjusted from the 8th day of the following month to the 25th day of the following month, and additional bonuses, as well as subsidies for employees to purchase cars, have been eliminated, according to the internal letter.
The year 2022 is full of challenges and difficulties, with repeated outbreaks of the Covid epidemic in many regions, which have had a large negative impact on the economy and society, and the capital markets are depressed, Shen wrote in the first sentence of the letter.
In addition to the impact of the Covid outbreak, challenges from the supply chain, rising raw material costs and delays in parts availability have also severely impacted WM Motor's production and operations, Shen said.
Since October, WM Motor has implemented a series of measures to cope with financial pressures, including a 50 percent pay cut for management and operating expense reductions, according to the internal letter.
This comes after employees in WM Motor's Shanghai office were notified of a pay cut, while Chengdu employees may face other cost-cutting measures, ifeng said, citing a person familiar with the matter.
The internal letter was reported after local media outlet The Paper said on October 23 that starting in October, WM Motor would pay only 70 percent of basic salaries to regular employees, and 50 percent to management.
These new financial measures are designed to help WM Motor weather the capital winter and get a better performance against future competition, The Paper said, citing a source close to the company.
WM Motor, once one of the best-known Chinese electric vehicle companies, hasn't done so well in the past two years.
The company had been posting monthly sales figures in 2020, but has often not been posting the numbers since last year.
In 2019-2021, WM Motor's vehicle sales were 12,799, 21,937 and 44,152 units, respectively.