During the Spring Festival, the movie "The Annual Meeting Can't Stop", which satirized the unspoken rules of the workplace, became unexpectedly popular, and the line "layoffs and Guangjin" in the play became a hot stalk for a while, but I didn't expect that a few months later, the plot came into reality.
Shortly after the Labor Day holiday, Li Auto officially announced a series of layoffs to cope with the challenge of sales falling short of expectations. According to relevant media reports, Li Auto is carrying out a new round of company-wide staff layoffs, and the 2023 financial report shows that Li Auto has nearly 31,600 employees, a year-on-year increase of 63%. In terms of optimization ratio, more than 5,600 people were involved in this round of optimization.
Layoffs involve multiple departments. The sales and service operation department will be optimized to more than 400 people, the recruitment department will be reduced from more than 200 people to 40 to 50 people, and the intelligent driving team will also be reduced to less than 1,000 people. In addition, the pure electric product team in Shanghai will also usher in a contraction, and some employees have gone to the headquarters of Li Auto in Shunyi, Beijing to discuss the follow-up product planning adjustments.
Li Auto's layoffs were mainly due to sales that did not meet the company's internal expectations. Although it delivered 376,000 vehicles in 2023 and became the third profitable new energy vehicle company after Tesla and BYD, the actual sales in March and April this year did not reach 30,000 units, which is far from the annual sales target of 800,000 units set at the beginning of the year. But the main reason is that the first pure electric product of Li Auto performed poorly, and after the launch of the pure electric MPV product that was vigorously built, it not only encountered a public relations crisis but also dragged down the brand image for a time, and the poor sales not only failed to help the ideal brand open the door to the pure electric track, but also intensified the company's operating pressure.
To this end, Li Xiang, the founder of Ideal, issued an open letter, admitting the problem of product rhythm, and gave a solution in the letter, saying that he would "return to healthy growth, focus on users rather than competition, focus on value rather than desire, and return to user value improvement." But I didn't expect that it was not the company leaders and senior management who made the decision, and the company ushered in a wave of layoffs just two months later.
Another person familiar with the matter said that at the end of April, the management passed the final optimization list, and this round of layoff optimization was officially launched in the first week of May, and most of them will end before the end of May, and N+1 compensation will be implemented for optimized employees.
Li Auto may hope to complete most of its personnel optimization plans before the lifting of the ban on employee stocks on June 15.
In 2023, the total compensation of Li Auto's employees will exceed 12.1 billion yuan, and the average salary per person will exceed 380,000 yuan. The scale of the layoff is more than 18%, which may save Li Xiang about 2.1 billion yuan.
In the current fierce competition in the automobile market, the news of layoffs of car companies is not uncommon, and the news of Tesla's global layoffs has been on the hot search not long ago, but soon everyone was shocked by Tesla's atmospheric layoff policy. Not only is there no disgraceful measures such as salary arrears and job transfers, but even the compensation for new employees is also a lot, for which many people ridicule Tesla as "malicious layoffs." "Mitsubishi has also set an example when it withdrew from China, not only promising to continue to provide users with repair and maintenance services, but also providing compensation or job transfer for unemployed employees.
Competition in the field of new energy vehicles is becoming increasingly fierce, and even the leading companies in the industry are actively preparing. In addition to Li Auto's layoffs, Tesla's global layoffs and BYD's implementation of stricter performance management methods reflect this trend. Li Auto's layoffs and personnel adjustments are also to participate in the competition more effectively and prepare for risks in advance.
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After the layoffs, the ideal problem did not decrease. If MEGA fails, how to adjust the strategy of pure electric products? How to optimize the design of nesting dolls, which have made consumers tired of looking at it? How to stay ahead of the competition on the extended-range track? The real crisis of Li Auto lies in finding new growth points or building "moats". Among the new forces, NIO has a battery swap station, Xpeng is focusing on the low-altitude economy, and Huawei's blessing has made up for the shortcomings of intelligent driving, which has become the biggest threat. Ideals are embattled, and sooner or later they will face a "battle of life and death". (The car has a culture Uncle Wen/Wen)