China’s real estate crisis is continuing to spread, and the home furnishing manufacturing industry in Guangdong is currently facing the challenges of layoffs, halting production, and closing stores. Euipian, a leading custom home furnishing company, recently issued an internal memo to its employees admitting that the company is on the brink of survival, and will resort to streamlining operations, optimizing personnel, and reducing costs drastically in a bid to survive. Over the past two years, Euipian has seen a net reduction of 6,164 employees.
On June 25th, Euipian’s CEO office and Human Resources Center released a memo titled “To All Euipian Colleagues”, stating that market contraction, intense price wars, and industry consolidation have led to a decline in the company’s revenue and profit margin. The company will continue to review positions, emphasizing that positions should not exist without value. Management has been instructed to abandon any sense of mercy towards unnecessary positions and make decisions to let go of some employees.
Mr. Chen, a home furnishing business owner in Foshan, told reporters that after the pandemic lockdown, the real estate market entered a crisis, causing a sharp decline in Euipian’s performance, making it impossible to sustain its previous scale of operations. Many furniture factories in Foshan are only open three to four days a week, with cabinets, wardrobes, and hardware products seeing stagnant sales. Several factories have taken a three-month break, and if the situation persists by October, they may face closure.
Public records show that Euipian’s workforce decreased from 24,044 employees in 2023 to 17,880 employees in 2025, with a net reduction of 6,164 employees over the two years, representing a decrease of approximately 25.6%. Between 2024 and 2025, there was a decrease of 2,702 employees.
In 2025, Euipian’s operating income was 17.232 billion yuan, a year-on-year decrease of 8.94%, with a net profit of 1.997 billion yuan, a 23.18% decline year-on-year. In the first quarter of this year, operating income decreased by 23.03% year-on-year, and net profit decreased by 49.73%. The company’s number of stores decreased by 468 in 2025, with an additional 339 closures in the first quarter of this year.
Responding to mainland Chinese media on June 29th, Euipian’s securities department personnel stated that the internal memo was mainly intended to communicate the company’s assessment of the market and management to employees, serving as a “hint” to staff, rather than outlining specific layoff plans. However, some employees disclosed on social media that prior to the memo’s release, some employees had already been summoned, with compensation packages lower than usual, and those who do not accept the package may be designated for standby duty.
Since going public in 2017, Euipian has seen consecutive annual profit growth, maintaining a leading position in the custom home furnishing industry in mainland China. However, starting from 2024, the company experienced rare double-digit declines in revenue and net profit.
Apart from businesses in Foshan, there is circulating information online about Loka, a custom home furnishing enterprise in Guangzhou, issuing a “production suspension and vacation notice” due to shrinking market demand and insufficient orders. The company plans to shut down in batches from July 4th to October 3rd. Wages will be paid normally for the first pay period, followed by issuing basic living expenses according to local regulations from the second period onwards.
Loka, which has been in the custom furniture business for over twenty years, operates production bases in Huadu, Guangzhou, and Qingyuan, Guangdong, covering a total area of approximately 250,000 to 300,000 square meters. The company currently employs nearly 2,000 people, operates close to 900 exclusive stores nationwide, and distributes its products in several provinces and cities across China. Its Qingyuan base was planned with an investment of around 700 million yuan in 2017, covering 150,000 square meters, with a designed annual production capacity of over 2.5 billion yuan.
A resident of Guangzhou, Mr. Zhao, mentioned that there are fewer people buying houses now, and even fewer are renovating their homes after purchasing them. He expressed concerns over the poor economic environment, with property prices falling daily instead of rising as they did before. He criticized the local government’s incentive for employees to buy houses, calling it a deception since the rewards are insignificant compared to the high property prices.
Mr. Fang, an overseas Chinese scholar, noted that the massive layoffs and production halts in the home furnishing industry are the consequences of the Chinese Communist Party’s long-standing reliance on real estate and land finance. He highlighted that the CCP uses high property prices to support local finances while extracting funds from companies and the public. He mentioned an instance where a developer revealed that the biggest profit beneficiary from every real estate project sold is the local government.
According to Mr. Fang, the CCP demands stability in employment from companies while not providing true survival space for private enterprises. This approach, in reality, aims to undermine private enterprises and hand over these sectors to state-owned enterprises.