Li Ning Co Ltd said it will reduce its staff count in a move to lower costs. The move comes after the Chinese footwear giant had predicted its revenue for 2011 had fallen by 6 to 7 percent year-on-year.
A public relations staff at Li Ning told the Global Times yesterday on the condition of anonymity that the company aimed to reduce day-to-day expenses and cut staff costs as a percentage of revenue by 0.5 percentage points this year.
The company's human resources costs as a percentage of its
sales were 8.7 percent in the first half of 2011.
In its
statement, Li Ning said the adjustment in organizational structure represents
part of the Group's ongoing strategic reforms. Through the adjustment, the
Group endeavors to sharpen its focus on the core business, optimize its organizational
structure, enhance its operational efficiency, and improve its net profit
margin. For the Group's front-office business development departments such as
Marketing, Sales and Product divisions, while the Group ensures to devote
necessary resources, it will further improve control and management of cost
effectiveness. As for departments related to non-core businesses such as the
Group's other brands division, the Group will further consolidate these
divisions in order to focus the Group's resources on its core business.
Regarding back-office function departments such as Human Resources, Information
and Technology, and Strategic Development divisions, the Group will streamline
the organizational structure of these departments to increase operational
efficiency, lower human resources cost, and channel resources to the Group's
core business. There will be corresponding adjustments in the personnel and
responsibilities of related departments to reflect the changes made during the organizational
restructuring. The restructuring includes streamlining the workforce,
consolidation of resources and motivation of performing employees. The Group
stresses that the direction of its overall strategic developments will not be
changed after this organizational restructuring.
Commenting
on the organizational restructuring, Mr. Zhang Zhiyong, CEO of the Group said,
“As with our continuous communications with the capital market and the
public, in view of the transformation China's sporting goods industry is going
through as well as the Group's determination for proactive reforms, ongoing
restructuring of the organisation and human resources is a necessary step in
order to achieve the Group's goals in reforms and strategic execution.”
Zhang further
emphasized, “The adjustment is beneficial to the Group's long-term development.
On one hand, the optimized organizational structure helps to enhance
operational efficiency and reduce headcount-related expenses. On the other
hand, it also further hones the Group's human resources management and also
strengthens its performance-oriented and results-oriented corporate culture.
The Group will also utilize more effective measures to identify and motivate
talents, allowing them to flourish and dedicate themselves towards achieving
our common goals.”
Li Ning, chairman
of the Group, also said, “With our excellent talent pool and positive
experience in organizational reform, the Group is well prepared for the current
adjustment in organisational structure. The Board of Directors and I have
confidence in the capability of the current management team in ensuring
stability of the business operations. The management team will also continue
its focused effort in the execution of the Group's future development strategy
as well as in enhancing operational efficiency and effectiveness of strategic
execution, laying a solid foundation for the Group to achieve its long-term
vision.”
The sportswear maker said in an announcement released in January that
the revenue would likely fall 6 to 7 percent in 2011 compared with the
previous year, due to “the flat growth in orders” and “repurchase of
some inventory from distributors.”
