Mobile World cuts 13,000 staff in half a year

Vietnam's Mobile World Investment Corporation (MWG) cut nearly 6,000 employees in the first quarter of 2023 to over 68,000, marking its second layoff in the past six months amid weakening purchasing power in the retail market, according to its financial report.

Earlier, the retail giant reported that its staff numbered 73,200 in Q4/2022, a quarter-to-quarter decrease of 7,000 employees.

In total, the firm laid off 13,000 people in the last six months, bringing its staff size to the same level at the end of 2021. However, on its website, Mobile World is offering 3,000 new vacancies.

At the end of 2022, the corporation paid VND1.57 trillion ($66.7 million) in bonuses to its employees, raising its total sum for staff in the year to VND9.5 trillion ($404.86 million), down 45% and 2.2% year-on-year.

It said its employee expense decreased VND900 billion ($38.36 million) year-on-year to over VND2.1 trillion ($89.5 million).

In its Q1/2023 financial report, Mobile World reported more than VND27.1 trillion ($1.15 billion) in revenue, down 25.7% over the same period last year.

Its gross profit margin fell from 22.3% to 19.2%, while its after-tax profit hit only VND21 billion ($895,000), a year-on-year plunge of 98.5%, the lowest quarterly level since 2014.

In Q1, the total revenue of its two chains thegioididong.com and Dien May Xanh dropped by 34% over the same period, with the earnings of most phones and electronics products falling by 25% to 35% year-on-year, respectively. Even tablets and laptops saw a sharp drop of about 40-50% in revenue.

Meanwhile, Bach Hoa Xanh store chain’s accumulated revenue only increased by 5% in Q1.

As of March 31, Mobile World's total assets decreased by 3.4% from the beginning of the year to VND53.92 trillion ($2.3 billion), including inventories valued at VND20.96 trillion, accounting for nearly 39%; cash balance and short-term financial investment worth VND19.81 trillion, or 37%; and fixed assets of VND9.1 trillion, 17%.

This year, Mobile World targets VND135 trillion ($5.75 billion) in revenue and VND4.2 trillion ($179 million) in after-tax profit, up 1% and 2% from the previous year, respectively. At the end of Q1, the company completed only 0.5% of the year's profit plan.

The HCMC-based retail giant reported an after-tax profit of VND4.1 trillion ($174 million) in 2022, down 16% year-on-year, fulfilling 65% of its target. Its net revenue hit VND133.41 trillion ($5.66 billion), up 8%, according to its consolidated financial report.

On the Ho Chi Minh Stock Exchange, MWG shares were priced at VND39,200 ($1.67) at Friday's close.