China firm cuts 500 workers despite Xi Jinping's appeal to avoid large-scale layoffs

The coronavirus outbreak in China is not just affecting valuable lives but it has also started impacting businesses in the country. According to the latest media reports, a media company in China has said that it will lay off 500 employees due to the contagious virus outbreak. Xinchao Media, a popular advertising firm in China, has announced on its official WeChat handle that it will cut 10% of its workforce to ensure survival. Xinchao Media is among the string of companies that have announced the lay off in the recent past due to coronavirus outbreak. 

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As per media reports, Xinchao's CEO Zhang Jixue had issued an internal statement, that was later shared on WeChat by the company. The statement said that the action is in response to overcome the epidemic. And to do so they will have to jam the cash flow to reduce costs as the company's cash reserve of 1 billion yuan would likely be enough for only 6-7 months without income. President Xi Jinping had reportedly earlier assured that the government would prevent job cuts caused by the virus outbreak, but the recent large-scale layoffs suggest a different story. Media reports indicate that companies are feeling the heat since January and the layoffs are a way to reduce costs and save the firm from shutting down. 

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Coronavirus outbreak

According to the latest reports, the coronavirus outbreak has claimed more than 1,000 lives in China alone and over 42,000 new cases have been confirmed in the country as of February 10. The country recorded its highest number of deaths in a single day since the outbreak was first reported as it confirmed 108 deaths on Monday. US Center for Disease Control (CDC) has said that the virus has already spread to 27 countries. United States President’s Coronavirus Task Force on Friday informed that the development of a vaccine is progressing well and it would hopefully be ready within three months. Media reports had earlier suggested that the virus originated from a seafood market in China's Hubei province, where animals were being traded illegally. 

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(With inputs from agencies)