(ECNS) -- Many securities firms are planning to downsize or cut wages as the prospect of profitability dims amid China's economic slowdown, China Business reported.
Well-known financial media professional Cao Shanshi disclosed in a widely forwarded article that the sluggish stock market has forced many brokerage houses to begin layoffs.
Cao said his sources include internal documents, salary slips and contracts provided by employees from at least 14 securities firms including GF, China Galaxy and BOCI.
The information shows that securities firms are now undergoing the hard process of laying off workers following massive expansion in the bull stock market during 2015. Some companies have disguised the layoff move by tightening performance evaluations or other measures.
Sources from Huatai Securities said a proposed new evaluation system meant 70 percent of employees would be laid off if implemented, according to Cao.
Founder Securities has announced it will lay off more than 1,000 employees, or 20 percent of its workforce, Beijing Youth Daily reported.
The firm said it aims to improve organizational efficiency and output per employee, but does not plan a compulsory lay-off or wage cut.
Insiders said 21 securities firms were required by the government to buy shares and bolster the falling stock market since the second half in 2015, a constraint that siphoned off profits.
"We might get an annual bonus only if the Shanghai composite index rises from well below 3,000 points to 4,500 points," said a source.
Two insiders noted that the moves are necessary restructuring at brokerage firms rather than a precursor for massive job losses in the sector.
