JD.Com Goes Aggressive On China’s Common Prosperity Drive After Alibaba, Tencent

  • JD.Com, Inc (NASDAQ: ) slashed salaries for about 2,000 managers by 10% – 20% and diverted some of those savings toward a $1.4 billion employee benefits fund, aligning China’s No. 2 online retailer with Xi Jinping’s “common prosperity” campaign to share the wealth.

  • JD.com founder Richard Liu will donate 100 million yuan ($14 million) of his own money toward staff welfare, Bloomberg .

  • The Alibaba Group Holding Ltd (NYSE: ) rival will also set up a 10 billion yuan fund to provide staff with interest-free home loans.

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  • “The employee benefits plan is currently being improved, with a focus on front-line staff,” Reuters . The company has 540,000 employees.

  • Beyond JD, senior executives across China’s $58 trillion financial system also faced additional pay cuts as firms from investment banks to mutual funds .

  • “I hope this move can realize the dream of securing a house for all employees who have worked for more than five years, including for our courier and customer service brothers,” Liu announced in an internal memo.

  • Liu stepped down this year as JD’s CEO, joining China’s tech tycoon exodus after the internet crackdown to focus on longer-term strategies while mentoring younger management.

  • He would also contribute to the revitalization of rural China, a priority of Xi’s.

  • Last year, Alibaba and Tencent Holding Ltd (OTC: ) pledged to spend billions to support the effort. At the same time, state-owned investment banks have implemented pay cuts and delayed bonus payments this year.

  • Price Action: JD shares closed lower by 1.58% at $51.67 on the last check Tuesday.

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