Yangzijiang Shipbuilding to slash 10% more jobs this year

CHINA'S Yangzijiang Shipbuilding Group is looking to slash 2,000 more jobs in a bid to further reduce costs as its order intake for shipbuilding slows.

A Yangzijiang Shipbuilding spokesman confirmed to The Business Times on Friday the company plans to cut 10 per cent of its current workforce, equivalent to 2,000 jobs, this year.

The shipbuilder cut 4,000 jobs earlier this year, bringing its workforce to 22,000. Those job cuts contributed to a reduction in the group's Q2 shipbuilding cost to 1.38 billion yuan (S$280 million), compared with 3.2 billion yuan last year.

The group said at its Q2 results briefing on Aug 6 it has secured US$600 million newbuilding orders so far, just under a quarter of its US$2.5 billion annual target for FY2016.

Sentiment for the shipbuilding industry remains weak, with global outstanding shipbuilding orders expected to fall to 100 million compensated gross tonnes over the first half of 2016, the lowest level since June 2013, the group said, citing a report by leading brokerage and research house Clarksons.

Yangzijiang Shipbuilding was not spared cancellation or deferment of its shipbuilding order book amid this downturn, although it had managed to secure buyers in the resale market for eight out of 10 of the newbuild orders that were announced as terminated in Q4 FY2015 and Q1 FY2016.

Work has not commenced on two other remaining vessels, the group said.