The Chinese cross-border e-commerce giant faces mounting challenges as it implements aggressive cost-cutting measures, including mass layoffs and controversial policy changes.
Bankruptcy Rumors and Corporate Pushback
Recent speculation about Banggood Technology filing for bankruptcy sent shockwaves through China's cross-border e-commerce sector, triggering widespread concern among suppliers, logistics partners, and competitors. The company swiftly denied these claims, asserting normal operations continue. However, industry observers note the firm faces unprecedented pressures that cast doubt on these reassurances.
The Layoff Storm: 3,000 Jobs Cut
Internal sources reveal Banggood initiated substantial workforce reductions beginning early this year. Within three months, approximately 3,000 employees reportedly lost their jobs—a significant figure representing thousands of affected families. Notably, the cuts extended beyond entry-level positions to include middle management, suggesting deeper organizational issues.
By April, the company announced plans to eliminate 30% of its workforce through a controversial "731 Evaluation System": 70% reductions in loss-making departments, 30% in non-profitable units, and 10% in profitable divisions. The restructuring reportedly cost over 30 million yuan in severance payments alone.
Controversial Performance Reforms
Concurrent with layoffs, Banggood implemented sweeping policy changes that drew employee ire. The company suspended meal subsidies and attendance bonuses while modifying performance evaluations to occur biannually rather than monthly. Employees rating C or D in these assessments now forfeit all performance pay for the evaluation period.
Additional changes include converting the workweek from double- to single-day weekends and reducing National Day holidays from seven to four days. Employees taking Saturday leave now face deductions of 10 hours from annual vacation time.
Changsha Office Relocation Sparks Outrage
On September 8, Banggood's Changsha branch announced relocation to Guangzhou headquarters by October 9—a move resisted by most employees due to the considerable distance between cities. Many view this as disguised layoffs, as the transition would force resignations from staff unable to relocate.
Employee Morale in Freefall
"Some wait for severance, some jump ship early, others endure daily uncertainty," one employee described the toxic atmosphere. Online forums reveal widespread dissatisfaction with broken compensation promises and deteriorating work conditions.
Multiple employees report considering collective arbitration to challenge perceived unfair treatment, while industry analysts warn Banggood's struggles reflect broader sector challenges as traditional bulk-selling models become unsustainable.
Industry-Wide Labor Concerns
Banggood's situation mirrors sector-wide trends, with numerous e-commerce firms implementing aggressive cost-cutting measures. Some companies have drawn criticism for mandatory overtime policies—including one Shenzhen firm requiring 30 monthly overtime hours with penalties for non-compliance—while offering misleading job postings about work conditions.
As of publication, Banggood has not responded to recent criticisms. The company's predicament serves as a cautionary tale about balancing restructuring needs with employee welfare during industry transitions.