China’s leading surveillance camera company, Hikvision, is significantly downsizing its local research and development departments, with plans to cut over a thousand jobs. In the first half of this year, Hikvision’s government sector business revenue saw a deficit mainly due to poor local finances.
On October 11, “Hikvision Massive Layoffs” became a hot topic on Weibo. Employees of Hikvision revealed that the company is currently undergoing a large-scale organizational restructuring, consolidating 32 research and development regions into 12, keeping only a few core areas and optimizing the rest, affecting over a thousand employees.
Several individuals identified as “Hikvision employees” on the job recruitment site “Maimai” disclosed that they have received notices of being laid off, with the research and development department being heavily impacted, especially in regions like Hunan where operations have ceased, while activities in headquarters areas like Hangzhou have not yet commenced.
By the end of October 11, Hikvision’s stock price had dropped by 5.6%, with the current market value standing at 273.6 billion yuan.
This marks Hikvision’s first report of massive layoffs, quickly becoming a trending topic on Chinese social media platforms. Many netizens believe the primary reasons behind this are the lack of funds and projects from the government and state-owned enterprises, as surveillance cameras are already prevalent and usable in many areas.
Weibo influencer “Former HR Essays” commented, “Hikvision specializes in surveillance, and with the current financial constraints of the government and the market downturn, this situation is not unexpected.”
Internet tech blogger and Weibo influencer “Unprecedented Scale. As the leader in the security industry, what has happened to Hikvision?”
Netizens chimed in, “The demand for weak current projects, like security, largely comes from city governments, and research and development are meant to support product use. So, have all the payments been settled?” “Hikvision’s projects are mostly for the government, but now there’s a lack of funding and projects.” “Previously, major infrastructure projects and smart cities, along with various government projects like traffic lights, were the main sectors. With the real estate slump now, Hikvision deals not only with cameras but also gates, access control systems, intercoms for buildings; the recession is inevitable.”
“Even industry leaders are struggling so much, and the remaining soup cannot be consumed even with a spoon.” “Has Hikvision, which has benefited from government projects and the people’s hard-earned money, finally reached its limit?”
Following the uproar caused by the layoff news, Hikvision responded by stating that there is no extensive layoff plan, but rather a strategic adjustment in operation, aiming to enhance research and development capabilities in key sales cities and the headquarters, leading to the adjustment of certain regional positions.
Hikvision, known for its surveillance cameras and being a pivotal player in China’s establishment of the “SkyNet” monitoring system, has grown into a global leader in the security industry over the past 20 years. However, in recent years, profits have continued to decline, with a deficit in public service revenue in the first half of the year.
Hikvision’s financial report for the first half of the year released on August 17 indicated total operating revenue of approximately 41.2 billion yuan, a 9.68% year-on-year increase, and a profit of around 5 billion yuan, marking a 5.13% decrease, the third consecutive year of declining profits.
Among the segments, the most significant decline was seen in the Public Service Business Group (PBG) catering to government departments, which generated revenue of 5.693 billion yuan in the first half, down by 9.25% compared to the same period last year. This was primarily attributed to poor finances in local governments, continued decline in public security and traffic police sectors, extended project cycles, and reduced predictability in demand realization.
Hikvision’s Senior Vice President Huang Fanghong admitted during the performance briefing that in the first half of this year, industries heavily reliant on local government financial investments have generally faced challenges; just as ordinary people talk about downgrading consumption, companies and government entities are also experiencing such constraints.