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Rumor: Kingdee Begins Major Layoffs

Southern Metropolitan News, 9/26/11

Chinese enterprise management software developer Kingdee International Software Group (0268.HK) has begun major layoffs, according to employees within the company, with some departments losing up to 20% of staff. In response, Kingdee said that the reductions were part of corporate restructuring and would affect approximately 5% of employees at the company's headquarters in Shenzhen.

According to one employee within Kingdee's marketing division, the company distributed an internal memo last week regarding structural readjustments now underway. The memo, the Kingdee source says, mainly details changes to be introduced at Kingdee's company headquarters. According to the source, Kingdee previously established a service division for each product the company offers, and a marketing, sales and R&D department for each service division. The internal memo, the employee says, suggests that Kingdee intends to integrate all service divisions at company headquarters into a single service division, which entails dissolving and merging the previously formed subordinate departments.

The Kingdee employee said that after the internal memo was sent out, all department-level managers began to call meetings at which staff were informed that at least 20% of employees within each department would be laid off. The employee source said that of the 8,000 people currently working at the company headquarters, at least 2,000 will now be laid off. Layoffs of a similar scale are now underway at Kingdee's various branch offices throughout China.

Keywords: corporate restructuring software Kingdee International Software 0268.HK HR enterprise software

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