On the evening of September 16th, a piece of news about the Peak Group implementing “across-the-board pay cuts” spread online, indicating that this pay cut affects all employees, with the highest reduction reaching 50%.
According to screenshots of online conversations, employees based at the headquarters with salaries ranging from 5000 yuan to 10000 yuan will face a 10% salary reduction; those earning between 10000 yuan and 20000 yuan will see a 20% cut; while those earning over 20,000 yuan will experience a 30% decrease in their salaries. Office staff at directly operated branch companies will face a 50% pay cut, while retail store employees will remain unchanged.
Multiple employees of the Peak Group confirmed the pay cut to the media, including Southern Metropolis Daily and Chengdu Business Daily’s Red Star News.
Some employees expressed discontent to the Southern Metropolis Daily about the pay cut. They mentioned that the notice of the pay cut was given verbally just four days before the payday without any written documentation or requiring employees to sign to confirm their agreement. Furthermore, the day after the pay cut, the chairman internally announced that the pay cut was met with “full understanding and support”.
A document issued by the Peak chairman’s office on September 16th stated, “Regarding this pay cut adjustment, after thorough communication and collection of opinions, all colleagues have shown understanding and support, reflecting the high level of teamwork and sense of responsibility within the company.” The document was signed by Peak Chairman Xu Jingnan.
However, the employees mentioned earlier, including himself, along with many others do not approve of this decision. Some have submitted objections to the human resources department regarding the pay cut event.
In response to this, senior partner Zhang Qi of Yingke Law Firm told the Southern Metropolis Daily that for a legal across-the-board pay cut, it must be based on full reasonableness. Notifying employees verbally only four days before the payday severely violates the Labor Contract Law, as verbal notice cannot prove mutual agreement and lacks legal validity.
According to a report by Interface News, during an internal meeting held by Peak on September 17th, Peak Chairman Xu Jingnan mentioned that the domestic directly-operated sector of Peak has been sustaining losses since the beginning of the year, accumulating losses of over 130 million yuan from January to July, leading to the necessity of divesting three branch companies, which is a key reason for the current pay cut.
However, as reported by the Southern Metropolis Daily, just ten days before the pay cut incident, the Peak Group had donated 100 million yuan to charitable causes in Quanzhou. This coincidence of timing has sparked public discussion on the priority of corporate decision-making.
Founded in 1989, Peak is headquartered in Quanzhou, Fujian, with its core business covering the design, production, and sales of sports shoes, clothing, and accessories. Peak Sports was once a listed company. In 2009, Peak Sports was listed on the main board of the Hong Kong Stock Exchange. However, in November 2016, its listing status on the Hong Kong Stock Exchange was officially revoked.