China developer CFLD cuts staff in Singapore office

Singapore

BARELY two years after setting up its headquarters here in June 2016 and going on a hiring spree earlier this year, the international arm of Chinese developer China Fortune Land Development (CFLD) has retrenched a number of employees in its Singapore office, The Business Times has learnt.

According to several affected employees who spoke to BT on condition of anonymity, CFLD International, the Singapore office of CFLD, first informed them of the retrenchment on Nov 5, and the company plans to ultimately cut 38 out of 90 employees, some of whom had been hired as recently as two months ago. (see amendment note)

The employees said that while the retrenchment was not entirely unexpected as several projects had not been performing well of late, they were taken aback by the scale of the cuts, calling them "drastic". They added that no reason was given for the retrenchment, only that the decision had been made by upper management.

Notably, CFLD recently received an investment of 13.8 billion yuan (S$2.73 billion) from Ping An Insurance in exchange for 20 per cent of the company's shares in June 2018, and three senior executives from Ping An took up leading roles in CFLD's management team earlier this month.

Although CFLD chairman Wang Wenxue recently told news outlet Mingtiandi that the group would "adjust its business model" under its new management, he made no mention of layoffs. The group would be shifting away from industrial townships to more senior housing, healthcare facilities, rental apartments and commercial projects, he said.

A spokesman for CFLD International confirmed that a retrenchment exercise is taking place in its Singapore office. The downsizing is also not limited to its headquarters here, which serves as the coordinating office for CFLD's teams and New Industry City projects within the region. Although the company's website currently states that it has offices in 10 countries, the spokesman said a number of them have been wound down as part of the overall restructuring exercise, as they were established to explore opportunities in those markets and were relatively small. CFLD International now maintains offices in only Singapore, Indonesia, Vietnam and Egypt.

However, the company declined to confirm the number of employees who have been affected by the retrenchment.

"CFLD has in the past few months undertaken an exhaustive examination of every aspect of our international business as we sharpen our strategy to ensure that we continue to keep a balance between current returns and sustainable growth," the spokesman said.

"As part of this comprehensive exercise, CFLD has restructured and streamlined our business and organisational structure. This meant that we had to take the extremely difficult but necessary decision to reduce head count in Singapore and in some of our regional offices."

CFLD International added that affected employees have been redeployed to other departments where possible, and those who could not be redeployed will receive compensation packages that are in line with local market practices.

In response to BT's queries, the Taskforce for Responsible Retrenchment and Employment Facilitation said the Ministry of Manpower had received the mandatory retrenchment notification from CFLD, and the affected employees will be offered career advisory and job search assistance under Workforce Singapore's Adapt and Grow initiative and the National Trade Union Congress's (NTUC) Employment and Employability Institute.

China Fortune Land Development is listed in China on the Shanghai Stock Exchange. In 2017, it posted a net profit of 8.8 billion yuan (S$1.7 billion), up 35 per cent from the previous year. Sales volume was 152.2 billion yuan, with income from the development of its New Industry Cities reaching 28.5 billion or 48 per cent of total business income.

Amendment note:

This story has been amended to reflect the actual number of employees affected by the retrenchment, following clarification from the company.