Recent reports reveal that even well-known sports brand, PEAK, from China is facing challenges amid the economic slowdown in the mainland. The company has recently undergone a wave of “collective pay cuts,” with some employees disclosing that PEAK issued a final ultimatum to those refusing the pay cuts, demanding them to either reflect on the matter or face suspension of their wages.
According to reports from Mainland China’s “Upstream News,” PEAK employees provided a formal document titled “Notice of Salary Suspension” that the company distributed to its employees. The document stated, “If you have not reflected on, clarified, and submitted a review of the relevant matters by October 14, 2025, the company will temporarily suspend your salary from September 2025.”
The document was stamped by PEAK Sports Equipment Co., Ltd. based in Xiamen, Fujian Province, dated October 12.
Additional letters attributed to PEAK Sports Equipment Co., Ltd. in Xiamen with a matching date of October 12 surfaced online, with similar content.
PEAK headquarters’ employee Zhang Qi (pseudonym) shared with a reporter that she received a pay cut notification on October 10, reducing her monthly salary from 9,800 yuan to 6,800 yuan without any prior consultation or consent. When she raised objections, her supervisor warned her that unless she provides a review, her salary would be withheld, mentioning that over twenty individuals had been summoned already. Zhang Qi expressed, “At that moment, I understood that what the company wanted was not understanding but compliance.”
Public reports indicate that PEAK implemented across-the-board salary cuts, with reductions of up to 50%, without prior notification to employees.
An internal screenshot of the company’s WeChat group revealed that PEAK’s management issued directives at “6:03 PM,” instructing all departments to convey three specific orders. The first order stated that individuals submitting written documents refusing pay cuts to company leaders would be deemed as disobeying company management, affecting salary calculations and disbursements. The second instruction required employees to report to the chairman in person or by phone by October 15, with the company handling the situation based on the actual circumstances.
A labor lawyer from Hubei province commented to the reporter, expressing that companies must not use administrative methods to request employees to provide reviews and cannot threaten to withhold salary. If verified, PEAK might be in violation of Article 38 of the Labor Contract Law, risking salary retrieval and administrative penalties.
Regarding companies threatening to withhold wages as a means of coercion, a former non-governmental organization member in Guangdong province emphasized that this practice is “doubly beyond boundaries” both legally and ethically. He cited Articles 35 and 38 of the Labor Contract Law, stating that alterations to salaries must be mutually agreed upon, and companies cannot unilaterally reduce wages or penalize employees by suspending wages.
Addressing labor rights, the aforementioned individual remarked that the PEAK incident reflects a tendency among some companies to shift operational risks onto employees. He pointed out that while it is understandable for companies to face operational difficulties, demanding employees to write “reflections” or “reviews” exceeds business boundaries, constituting a dual infringement on personal dignity and labor rights.
Upon contacting PEAK’s office in Quanzhou to inquire about the issue of withholding wages to compel employees to submit reflection materials, the call was abruptly disconnected upon learning of the journalist’s purpose. A staff member of Quanzhou’s Human Resources and Social Security Bureau mentioned that they are handling the matter and could not disclose further details.
A report by “Extreme News” on September 18 indicated that PEAK has not yet issued an official statement. Internal sources revealed that Chairman Xu Jingnan mentioned during an internal meeting that the company was facing severe losses, necessitating salary reforms for long-term development. According to him, the domestic sales department incurred losses of around 130 million yuan from January to August of the year, grappling with inventory backlog and soft market demand.
In response, the Human Resources and Social Security Bureau of Quanzhou stated they are monitoring the PEAK Group’s pay cut incident and will verify whether the company is engaged in any violations. A bureau official mentioned that the legality of pay cuts depends on specific circumstances; if employees feel their rights are compromised, they can request an investigation or seek legal assistance.
Since 2025, pay cuts across Chinese enterprises have extended from manufacturing and internet industries to finance, real estate, and state-owned enterprises. Industry statistics indicate that over sixty percent of companies have adjusted salaries downwards this year, with some public officials in certain regions required to “voluntarily reduce salaries” or “return subsidies.”
Several economic experts highlighted that the trend of pay cuts reflects a combination of weak domestic demand, shrinking corporate profits, and strained local finances in China. A professor from the South-Central University of Economics and Law (requested anonymity) remarked, “When market confidence declines, and employment pressures rise, cost-cutting becomes a short-term measure for companies, but the long-term outcome will lead to further shrinkage in consumer spending.”