Hikvision, a leading global manufacturer of security equipment provider sanctioned by the US, has been reported to be implementing large-scale layoffs. However, the company has denied these claims, characterizing the situation as a business strategy adjustment.
According to reports from ICSmart, Tencent Tech, and Changjiang Times, Hikvision employees have alleged that the company is undergoing a major organizational restructuring. This restructuring is said to involve a reduction of its 32 R&D regions to just 12, with only a few core areas being retained. Employees claim that this optimization process could affect more than 1,000 positions. Several individuals identifying as Hikvision employees have reported receiving layoff notices, with the R&D department reportedly bearing the brunt of these changes.
In response to rumors of widespread layoffs, Hikvision has clarified that it is not implementing large-scale job cuts but is instead making strategic business adjustments. The company stated that its goal is to optimize R&D capabilities at its headquarters and in key sales cities, which will require positional adjustments in certain regions.
Hikvision's recent management reshuffle has sparked rumors of layoffs following a significant overhaul of its top leadership team in August, which aimed to help the company navigate a rapidly evolving technological landscape and geopolitical challenges.
Among the key departures is Zongnian Chen, who stepped down as chairman after 16 years of leadership, during which he played a crucial role in transforming Hikvision from a startup into a global industry leader. He will also relinquish his role as the legal representative and chairman of Cethik Group, the company's controlling shareholder.
Additionally, long-serving executive Weichi Wu has retired, having been with Hikvision since 2001 and holding various senior positions, including vice president and executive vice president. Senior vice president Jin Duo and other board members have also left the company.
In terms of new appointments, Yangzhong Hu, the former CEO, has been elected as the new chairman, while Peng Xu has been promoted to CEO. Fanghong Huang has been appointed as senior vice president and secretary of the board, with several other executives also named to senior positions within the organization.
The management reshuffle at Hikvision comes as the company faces increasing scrutiny over its products' use in surveillance and human rights abuses. The company has also been subject to US trade restrictions, which have impacted its business.
According to Tencent Tech, One perspective on the positional adjustment is that it is driven by the pressures of Hikvision's recent performance growth. After experiencing sales growth from 2019 to 2023, the company's total revenue growth rate has begun to decline, recording 2.14% in 2022 and 7.42% in 2023, down from a significant 28.21% in 2021. Furthermore, its net profit attributable to the parent company peaked at CNY16.8 billion (US$2.37 billion) in 2021 but has since decreased in 2022 and 2023. In the first half of this year, while Hikvision's total revenue achieved year-on-year growth, its net profit attributable to the parent company continued to decline.
Hikvision's recent adjustments to its management team and R&D focus are perceived as a response to the evolving technologies of AI, big data, and cloud computing, which are driving upgrades in video surveillance equipment. Some believe the management reshuffle in August was intended to rejuvenate the organization and better position it to adapt to these technological advancements.
