Less than two weeks after taking its business private, Hong Kong based sourcing giant Li & Fung is restructuring in a move that will potentially see the loss of more than 1,500 jobs.
The company, which has been buffeted by the US-China trade war and customer bankruptcies, says the global coronavirus pandemic has been the final straw.
“Covid-19 has dramatically impacted the global retail industry and this unprecedented event has affected all our customers, suppliers and also Li & Fung,” it said in a statement shared with just-style.
“As a result, we have been forced to restructure and adjust our teams globally due to the changes in our customers’ business. Unfortunately, this includes some redundancies of Li & Fung staff. These difficult changes impact less than 10% of our global workforce and all departing colleagues are receiving their full entitlement under the respective employment laws in each market.”
According to Li & Fung’s workforce metrics for 2019, the company employed 16,796 people around the world, 93% of whom were based in Asia Pacific.
“These painful steps are necessary and have only been made after thoroughly exhausting all measures such as staff redeployment and salary adjustments,” the company added.
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By GlobalDataLi & Fung also said the number of layoffs in Hong Kong were “considerably lower” than the 70% figures quoted by some inaccurate reports published late last week. This was, it added, “a vast overstatement of the real number.”
The reorganisation comes after the business delisted from the Hong Kong Stock Exchange (HKEX) on 27 May after completing its privatisation process.
It received an offer worth US$930.7m to take the company private by a group controlled by the founding Fung family in March. The Fung family remains the controlling shareholder with 60% of the voting shares, while GLP, a global logistics warehouse operator and investor headquartered in Singapore, holds 40% of voting shares and 100% of the non-voting shares – giving GLP having effective economic ownership of 67.67%.
