China’s intention was to quietly lay off millions of people over the next few years. As part of its efforts to curb industrial overcapacity and pollution, the country is aiming to lay off 5 to 6 million state workers over the next two to three years. This will represent Beijing’s boldest cost-cutting program in nearly two decades.
“The government plans to lay off five million workers in industries suffering from a supply glut, one source with ties to the leadership said. A second source with leadership ties put the number of layoffs at six million,” said Yin Weimin, the minister for human resources and social security, in a news conference.
If you didn’t know, China’s leadership is passionate about “maintaining stability and making sure redundancies do not lead to unrest” and the country will spend approximately 150 billion yuan ($23 billion) to cover layoffs in the next two to three years in just the coal and steel industries. According o Reuters, moves are being made to control industrial overcapacity and pollution.
China’s National Bureau of Statistics states that the coal and steel sectors in China employ nearly 12 million workers. In addition, the country had previously announced that it planned on cutting 150 million tons of crude steal capacity and 500 million tons of surplus coal over the next three to five years.
Industry researcher Jiang Feitao at the Academy of Social Sciences believes the layoffs appeared reasonable to the government’s capacity target dates:
“It’s difficult to predict a time frame, but it will not be a quick process. There are many issues to be dealt with, including how to pay debt as well as layoffs.”
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