China Mobile Denies Large-scale Layoff Rumors

Sina Tech, 8/20/14

China Mobile (NYSE: CHL; 0941.HK) has denied recent rumors that the mobile operator's provincial subsidiaries in Shandong, Fujian, Shanxi and other provinces have laid off almost 300,000 dispatch workers. Dispatch workers in China sign labor contracts with third-party companies, and are then sent to work at larger enterprises. China Telecom (NYSE: CHA; 0728.HK) and China Unicom (NYSE: CHU; 0762.HK; 600050.SH) are reported to be similarly firing dispatch staff.

According to provisional regulations passed by China's Ministry of Human Resources and Social Security (MOHRSS) this year, dispatch workers must not exceed 10% of any company's total workforce, and any company exceeding this threshold must gradually lower the number to below 10% by the end of February 2016.

Editor's Note: According to a leaked China Mobile report, dispatch employees comprise 62% of the company's workforce. Among China Unicom's 350,000 workers, approximately 150,000 reportedly work as dispatch employees.

Keywords: China Telecom China Mobile China Unicom Ministry of Human Resources and Social Security wireless CHL 0728.HK 0762.HK 0941.HK 600050.SH CHA CHU HR

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