Controversy is mounting in China after an auto parts maker in Jiangsu Province dismissed more than 100 college graduates just one month after they joined the company.
Xingyu, a vehicle lighting systems maker based in Changzhou, Jiangsu Province, recently began large-scale job cuts targeting new hires, citing deteriorating earnings, according to Chinese business outlet Caixin and other media on the 2nd.
The company gave those affected two options, according to reports. They could sign a voluntary resignation agreement citing "personal reasons" and receive half a month's pay in compensation, or stay with the company but move to an assembly line position paying less than their original salary.
The issue is that these employees were recruited for research and development, engineering and management roles, not production jobs.
Xingyu hired a total of 440 college graduates recently, according to the Changzhou Human Resources and Social Security Bureau. Of those, 107 have terminated their employment contracts through negotiations with the company.
The controversy spread in earnest after the affected new hires described their experiences on social media. As accounts emerged of workers forced to choose between resigning and transferring to a production line only weeks after joining, criticism of the company's actions mounted online in China.
As the fallout widened, a global automaker that sources parts from Xingyu stepped in. Volkswagen's China unit said on the 1st that it had launched an internal investigation after learning of the matter.
Volkswagen said it had received information regarding the dismissals at Xingyu and had immediately begun investigating to establish the facts. The company added that fundamental values and rights must be respected and protected across the entire supply chain, and that it takes any allegations of rights violations very seriously.
Observers in China say the case shows how corporate cost-cutting amid a slowing economy is falling directly on young people who have just entered the job market.
