China State Shipbuilding Corporation (CSSC) will lay-off 1,000 employees from Shanghai Shipyard until the end of the year. The decision was taken amid restructuring program and optimization of the business, trying to improve the liquidity and competitiveness of the shipyard. The workforce cut will be implemented through various means including early retirement, contract termination and job transfers. Most of the affected employees will be external contractors, but large part will be from the core workforce. According to the officials, the layoffs will be done according to the country’s labor law and previously approved conditions, including one month notification.
The large layoffs will start in November and will last until the end of the year. Some of the activities of the shipyard will be closed and capacity will be reduced against the crisis in the sector.
China State Shipbuilding Corporation (CSSC) is an extra large conglomerate and state-authorized investment institution directly administered by the central government of China. It boasts its being the mainstay of the shipbuilding industry in China. Under its wing, there are totally 60 sole proprietorship enterprises and shareholding institutions, including Shanghai Shipyard. Like most shipyards, Shanghai Shipyard is suffering from a lack of new orders. Since the beginning of the year, the shipyard was awarded with contract for building two 2,500 TEU container ships from Zhonggu Shipping and two survey vessels from domestic geological survey institute. The increasing debt and the lack of new orders, pushed the management to start optimization and restructuring program, which should decrease the debt and improve the liquidity of the shipyard.