Retail giant Mobile World lays off nearly 6,000 employees in H1

Mobile World Investment Corporation (MWG) cut 5,936 employees in the first half of this year, raising the total number of employees laid off as of June 30 to 59,478.

The number of MWG employees decreased by 8,548 compared to the same period last year.

Despite cutting thousands of employees, the company's total employee costs still surged nearly VND1 trillion ($39.66 million) year-on-year to VND4.76 trillion ($188.76 million).

During the six-month period, the company accelerated the restructuring of chains and closed inefficient stores. By the end of Q2, the firm had 5,446 stores, down 148 from the beginning of the year.

MWG mainly closed The Gioi Di Dong (mobile phones), Dien May Xanh (electric and electronic home appliances) and An Khang (pharmacy) stores, while increasing three Bach Hoa Xanh (grocery) stores, maintaining AVA Kids - a retail chain of mother and baby products, and strenthening the Erablue - a joint venture in Indonesia.

In its Q2 consolidated financial statement, Mobile World reported revenue of VND34.13 trillion ($1.35 billion) in the quarter, up 16% over the same period last year. Its gross profit margin improved from 18.4% year-on-year to 21.4%.

Sales costs decreased by nearly VND200 billion ($7.93 million) but management costs expanded nearly 4 times to VND813 billion ($32.24 million). Other activities saw losses up from VND60 billion to VND182 billion ($7.22 million).

However, MWG still made a profit of VND1.17 trillion ($46.4 million) in Q2, many times higher than the VND17 billion ($674,140) in the same period last year.

In the first half of 2024, MWG reported revenue of VND65.62 trillion ($2.6 billion) and net profit of VND2.07 trillion ($82.08 million), 16% and 53 times higher than the figures in the same period last year, respectively. As a result, the retailer has achieved 52% and 86.4% of the year's revenue and profit targets.

Consumer goods made the greatest contribution to overall revenue, with VND19.4 trillion ($769.3 million) coming from the Bach Hoa Xanh chain, a year-on-year increase of 42%.

The chain earned a profit of nearly VND7 billion ($277,600) in Q2, but still suffered a loss of VND98.4 billion ($3.9 million) in H1, a significant decrease compared to the loss of VND659 billion in the same period last year.

In H1, the The Gioi Di Dong and Dien May Xanh chains recorded combined revenue of VND44.2 trillion ($1.75 billion), up 6.3% year-on-year, while An Khang and Erablue reported respective losses of VND172 billion ($6.82 million) and VND47 billion.

At the end of Q2, MWG had total assets of VND63.54 trillion ($2.52 billion), a rise of VND3.43 trillion from the beginning of the year. Of which, cash, deposits and short-term financial investments accounted for 47.5% or VND30.24 trillion, up nearly VND6 trillion compared to the year beginning.

The corporation reduced loan debt by about VND1.45 trillion to nearly VND24 trillion ($951.72 million). However, its equity surged nearly VND2.7 trillion to VND26 trillion.

In H1, the company paid cash dividends, reducing equity by VND731 billion ($29 million), but non-controlling shareholder interests increased nearly VND350 billion ($13.88 million).

On April 8, BHX Tech, a subsidiary of MWG, completed the issuance of nearly 74 million shares or 5% of its charter capital, to a new partner, reducing MWG’s ownership ratio in the Bach Hoa Xanh chain from 99.99% to 94.99%.

Mobile World is listed on the Ho Chi Minh Stock Exchange as MWG, which closed Friday at VND62,900 ($2.49) per share.