Lay off all employees, another cross-border giant officially announces closure

In recent years, foreign trade factories have faced severe survival difficulties . On the one hand, the turmoil of the global economy and trade tensions have made market demand unstable and orders have decreased. On the other hand, high inflation and rising costs have also dealt a heavy blow to foreign trade factories .

In such a market environment, although large foreign trade manufacturers are trying hard to save themselves, many of them are still struggling to survive and cannot avoid bankruptcy and suspension of production and business .

Recently, news broke that another well-known foreign trade factory in Shenzhen announced its closure.

A well-known foreign trade company in 31 years announced the closure of business

Recently, Shenzhen Weiqun Precision Machinery Products Development Co., Ltd. (hereinafter referred to as "Weiqun Machinery") issued an announcement, officially announcing that it will stop production and business on June 6 this year, and all employees will be laid off in advance . So far, this old foreign trade company with a 31-year history has withdrawn from the stage of history.

In the closure notice, Weiqun Machinery mentioned that since the outbreak of the epidemic, the factory's operating difficulties have become increasingly serious, and it has been struggling to support the livelihoods of all employees. However, the trend of economic weakness and continued decline in consumption capacity has become increasingly severe, and it has become unsustainable until recently, so the factory had to suspend operations.

It is worth noting that compared with some other large factories that have closed down, Weiqun Machinery's handling of the matter is relatively mild. The factory said that it will provide financial compensation to employees who have not reached retirement age in accordance with the requirements of China's labor law, pay the corresponding average salary according to the different years of work of different employees, and will also negotiate and settle with employees who need to leave early to find a job.

Public information shows that Weiqun Machinery was established in 1993. It is a Hong Kong-funded foreign trade factory with a history of 31 years. The factory mainly focuses on the production and sales of machinery and parts, cutting tools, craft products and mechanical plastic products . Like most foreign trade companies, Weiqun Machinery relies heavily on overseas markets, accounting for 100%, and its products have good sales and reputation in many regions.

Shrinking overseas demand has led to fewer orders, but the factory's production capacity is still strong. This situation is common among foreign trade factories. However, supply exceeds demand, and the factory's losses will increase day by day. For Weiqun Machinery, which is 100% dependent on the overseas market, this blow is fatal and cannot be ignored. Until the end, such a long-established large factory is trying to find a way to provide compensation to employees, which is really regrettable.

Many well-known old companies have fallen one after another

In fact, in recent years, it is not only large factories specializing in mechanical products that have been forced to close due to operational pressure, but also large foreign trade factories such as electronics, toys and small household appliances, which to a certain extent reflects the changes in overseas consumer trends.

1. Shenzhen Yuantong Hardware & Plastic Products Co., Ltd., a Hong Kong-funded large factory, has stopped production and business

After 30 years of operation, the company issued an internal notice on August 11, 2023, deciding to suspend production and operations on September 13.

The company said in the notice that due to the dramatic changes in the domestic and international markets in recent years, it had to make the decision to suspend operations in order to cope with the challenges. On the day of suspension of production, the company will lay off 1,800 employees and pay corresponding compensation in accordance with national laws and regulations.

2. Xin'an Electric (Shenzhen) Co., Ltd. announced bankruptcy

On August 15, 2023, Xin'an Electric, a well-known home appliance manufacturer in Shenzhen, announced its early dissolution, ending its nearly 30-year operation. The company said that the global economic downturn, reduced orders and the impact of the global epidemic have led to a sharp deterioration in the company's operating conditions, forcing it to make this difficult decision. The production suspension date is set for August 18, 2023.

In order to properly relocate employees, the company will notify all employees in writing and pay corresponding economic compensation in accordance with the provisions of the Labor Contract Law. The calculation deadline is August 18, 2023, when the labor contracts of all employees will be legally terminated.

3. Dongguan Hubang Hardware & Plastic Products Co., Ltd. ceases production

A 30-year-old company announced its closure in October 2023. The company has been losing money in recent years, and after careful evaluation, the top management believes that it is unable to reverse the downward trend, so it decided to close in batches from October 31 to November 20, 2023.

The company will terminate the labor contracts of all employees in accordance with the law. The employees' wages will be paid until the date of termination, and social security will be purchased until the month of termination. This decision is a painful choice for the employees who have followed the company for many years and the Dongguan market that has been carefully managed.

4. Dongguan Weiya Electronics Co., Ltd. closed down and liquidated

In June this year, the well-known Hong Kong-funded cable manufacturer "Dongguan Weiya Electronics Co., Ltd." also officially announced its closure and will sell all its assets to repay the employees' wages, social security and accommodation expenses for the past two months. It is understood that the factory has a 13-year development history and once had a high influence in the European and American markets. However, in recent years, the price of raw materials in the cable industry has continued to rise, the factory's production costs have remained high, and external orders have been unstable, so it has been difficult to operate and eventually collapsed.

Final words

The collapse of established foreign trade giants in the cross-border e-commerce industry also highlights the multiple difficulties faced by the industry. From internal management to external environment, supply chain to customer demand, each link may become a fatal weakness for the company.

Traditional foreign trade has shrunk, factories have closed down, workers have lost their jobs...especially the "disappearance" of many old factories has made many people in the industry feel regretful, because their glory once represented the development of foreign trade exports.

As the global situation becomes increasingly severe, more and more foreign trade companies are being eliminated and closed. How to deal with this situation is an urgent problem that many foreign trade factories need to solve.