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    Jingdong exchanges blood Liu Qiangdong to the "brothers"

    2019-04-12 12:46:11

    Chinese Entrepreneur Magazine

    The intensified personnel turmoil has caused the people inside Jingdong to float and everyone is at risk. But this is far from the end, and a bigger organizational change storm is coming.

    Since April, Jingdong has been intensively brushing the screen, and the organization has adjusted the news. The fierce means not only made the outsiders puzzled, but many internal employees said they could not understand.

    In February, JD.com announced in a high-profile meeting at the opening ceremony that it would eliminate 10% of the vice president-level executives. Beginning in March, Chief Technology Officer (CTO) Zhang Chen, Chief Legal Officer (CLO) Long Yu, Chief Public Affairs Officer (CPO) Blue Dragon have resigned. On April 9, 7FRESH President Wang Xiaosong and the President of Fashion Life Division Hu Shengli were also transferred from the original post.

    On April 8, the media reported that Jingdong will cancel the basic salary of its courier, increase the courier's receiving task, and the number of pieces will be included in the performance appraisal. At the same time, starting from June 2019, Jingdong will reduce the courier's provident fund factor from 12% to 7%. After that, the courier who joins the company will not have a provident fund.

    On April 9, according to Silicon Valley technology media TheInformation report, Jingdong is preparing a new round of layoffs involving 8%, and some “key business functions teams” will lay off about 50%. It is predicted that the Beijing headquarters and logistics warehousing team may become the hardest hit areas for layoffs.

    On April 11th, according to the all-weather technology report, a senior vice president of Jingdong mentioned in a recording that the first wave of Jingdong’s abolition is the executive, and the director will be the turn, then the ordinary staff, the personnel adjustment will be Completed at the end of April. In addition, a Jingdong executive said at an internal meeting that the company's GMV growth rate has fallen to 20% in the past few months.

    At the beginning of the opening year, Jingdong’s organization began to change from high-level to middle-level leaders, grassroots business employees, and express delivery employees. It can be said that no one of the 178,000 employees can stay out of the way.

    Within JD, this organizational change is called "returning to the entrepreneurial era." But in the short run, the violent turmoil has also caused employees to be unstable and everyone is at risk. The effect of the change will be, and ultimately whether its core planner Liu Qiangdong will do so, no one can predict it.

     Jingdong exchanged blood, Liu Qiangdong opened the knife to "brothers"

    Executives out

    Looking back, Jingdong’s personnel storm has been brewing for a long time.

    Starting in February, JD.com actively released the news that 10% of VP-level executives will be abolished. This declares Liu Qiangdong's determination to start the change from the highest level of leadership in order to be more convincing to the full staff.

    Although Liu Qiangdong has been behind the scenes since the "Minnesota Incident", the rotating CEO Xu Lei was pushed to the stage more frequently, but no one doubts that Liu Qiangdong is still the core controller of Jingdong. At the executive meeting in March, he was instructed to subordinate, accusing them of "bringing up the gang and being overstaffed."

    Liu Qiangdong’s voice just fell, and Jingdong’s three CXO Zhang Chen, Long Yu and Lan Lan have left.

    However, compared to other turmoil in JD, the departure of these three executives is not very surprising.

    According to Jingdong’s internal staff, Zhang Chen was “overhead” for many years and has no real business power. In January 2018, after Zhang Wei, the former chief scientist of Huawei, joined the post, Zhang Chen’s status was even more embarrassing. In the second half of 2015, Lanxie was marginalized after being transferred from the Chief Marketing Officer (CMO) to the Chief Public Officer (CPO). Long Yu is a classmate of Liu Qiangdong at the China Europe International Business School. Before becoming the Chief Legal Officer (CLO), he served as the Chief Human Resources Officer (CHO). His business ability is trusted by Liu Qiangdong. However, in order to cope with such a drastic organizational change in the current Jingdong, the interest that is involved may not be the "airborne faction" of the rain.

    Zhang Chen, Long Yu and Lan Lan are the only foreign professional managers in Jingdong. All of their exits marked the end of Liu Qiangdong’s plan to introduce external forces to transform Jingdong from 2011.

    Compared with the departure of these three CXOs, Wang Xiaosong and Hu Shengli’s transfer of posts have shocked Jingdong employees. They are the first-line business leaders of Jingdong, and they are also the squadrons that Liu Qiangdong and Xu Lei once relied on. In the organizational changes over the years, Wang Xiaosong and Hu Shengli were all entrusted with important tasks.

    Wang Xiaosong joined Jingdong in 2008. He was the youngest VP of Jingdong and has served as the head of the 3C Business Unit and the Fresh Food Division. Since Hu Shengli joined Jingdong, he has served as vice president of Jingdong Group and president of 3C business unit. According to JD internal staff evaluation, they are known for their execution, combat effectiveness and high emotional intelligence. Among them, Hu Shengli was responsible for the 3C business department, because almost all of the major mobile phone manufacturers at the press conference will have him face to face, and in the circle is called "Hu iron legs."

    In January 2018, Jingdong Mall established the Daxie Consumer Group, the Electronic Entertainment Group and the Fashion Life Group. They appointed Wang Xiaosong, Yan Xiaobing and Hu Shengli as the presidents of the three business groups and were promoted to senior vice presidents of Jingdong Group. These three executives have successively come from the JD 3C system. This appointment is also regarded as the overall superiority of the Jingdong local faction.

    After a period of less than one year, in December 2018, JD.com took the largest structural adjustment plan in history. The mall was reclassified as the front, middle and back office, and the large fast-moving business group was split, and the fresh-keeping business unit merged with 7FRESH. After the adjustment, Wang Xiaosong was in charge of the Fresh Food Division, and Hu Shengli was responsible for the newly established fashion home platform business group.

    The two appointments of Wang Xiaosong and Hu Shengli were regarded as Jingdong’s battle against Ali under the tremendous performance pressure. Among them, the development of the 7FRESH of the label box Ma Xiansheng is a hard battle. Wang Xiaosong once told the media that 7FRESH will open 1,000 stores in the next 3 to 5 years. But in the first year, only 7 new stores in 7FRESH opened. Due to the high cost of a single store, the Jingdong Group has swayed whether or not to bet on fresh food, and Wang Xiaosong’s status has become subtle.

    In the past year, Hu Shengli’s main task was to unite a large number of partners for Jingdong, which lacks fashion genes. Under the leadership of Hu Shengli, Jingdong successively became a shareholder of Vipshop, and established a new company with Mushroom Street, and the performance of the fashion business group has also increased significantly.

    Therefore, Jingdong employees are puzzled by the transfer of Hu Shengli. "It is not clear whether Lao Liu (Liu Qiangdong) is impatient with their work. If they are transferred to a job, they should be completely marginalized."

    Although the appointment of these two executives has not yet been announced, historically, this is not the first time that Jingdong has adopted rotation. At the beginning of 2013, Cheng Junyi, the former senior vice president of Jingdong Marketing Department, transferred to the POP open platform. It was also a round of rotation triggered by the corruption case in October 2016. In Jingdong’s culture, rotation often means softness. Demotion, or break the existing "gang". For executives, "rotation" is mostly not a positive signal.

     Jingdong exchanged blood, Liu Qiangdong opened the knife to "brothers"

    Talent orientation

    At the moment, Jingdong faces too many challenges from the inside out.

    From the inside, on the one hand, all Internet companies must solve the problem of demographic and traffic dividends, meet the diversified needs of users, and be efficient in management. On the other hand, JD has been in the supply chain, logistics, technology, services and other fields for many years. The accumulated ToC core capabilities need to begin to decouple and open to business partners, completing the jump from the consumer Internet to the industrial Internet.

    At the level of external competition, the use of innovative buying methods quickly opened up the sinking market. In the second half of 2018, Jingdong’s share price plummeted, and the market value was almost overwhelmed. At the same time, community group purchases have arisen. After a lot of competition, companies such as Yunji, Youzan and Beidian have sprung up. The rapid development of the retail competition format requires Jingdong to completely reverse its thinking, innovation and action logic.

    However, it is difficult to know. How to break the existing business and innovation model and let the elephant dance? Liu Qiangdong thinks what kind of talents Jingdong needs at the moment, and what kind of Jingdong does he hope to shape?

    From the style of the new CHO Yu Rui, who has been promoted from the fire line, it may be possible to read some of Liu’s expectations for a new generation of talent.

    In 2008, Yu Rui became a Jingdong Guan Peisheng, and served as a logistics manager, general manager of Central China, and general manager of East China. He has led a team of more than 10,000 people to work hard in East China. In 2013, one-quarter of Jingdong Mall's 300 million yuan orders were completed by the East China team.

    In 2016, after the integration of No. 1 store into Jingdong, Yu Rui became the CEO of No. 1 store. From Guan Peisheng to VP, Yu Rui only spent 8 years.

    According to Jingdong's internal staff, Yu Rui's style is directly bold, and there is a similar "Xu Lei", and there is no shortage of killing decisions. When he took office, he asked VP-level executives to sit in the middle of the staff and change the personal office into a conference room.

    In 2009, during his tenure as a manager in Beijing, in the face of the turmoil in the team, after a smooth "618" celebration, Yu Rui held a meeting to announce a big change of blood and cut all the unruly employees. It is said that at the meeting he said: "You don't force the company to make multiple-choice questions. If you do multiple-choice questions, you will have no chance of winning 1% compared with me."

    On April 3, JD.com issued an internal mail saying that it would eliminate or negotiate three types of people in the future: 1. People who can't fight hard, regardless of their performance, their position, whether they are old employees or Guan Peisheng, no matter the body. The reason is still family reasons; 2, can not do, that is, people with poor performance; 3, people with low cost performance, some people continue to promote salary increases, or because of job mobilization, lost cost, let younger, more costly Low people, or demotion and salary reduction.

    Although Jingdong responded that the article is a one-sided interpretation, Jingdong advocates entrepreneurship and hard work spirit, and hopes to create an environment in which the company relies on fair and diligent efforts rather than misunderstandings. However, people can still read from behind the mail. JD's future employment orientation and current cost pressures.

    Jingdong employees revealed to the "Chinese Entrepreneur" that Jingdong has a high demand for cost and efficiency, and the "996" assessment of all employees has become the norm; employees are required to fill out KPI assessment forms on a quarterly basis, and travel, marketing and other expenses are also greatly controlled or reduce.

    The performance appraisals faced by executives are more stringent. According to TheInformation, on April 2, Jingdong CEO Assistant sent an email to the executives listing four possible actions that could lead to dismissal, including bad treatment of suppliers, wasting money on new projects, and over-expanding confidence. And the cost of travel and meals is high. The email reads: "No matter the position or level, if they lose value, they will be fired."

    In such a drastic change, departments that are unable to achieve results quickly and produce benefits will face increasing pressure to be adjusted and abolished.

    On April 5th, a list of Jingdong VPs “to be optimized” was distributed on the Internet. The list included the vice president of Jingdong Mall and the head of Jingdong Y Business Unit, Yu Yongli, the vice president of Jingdong Group and the president of Y Business Department. Du Shuang, vice president of the former Jingdong New Channel Business Unit, and others. On this list, in addition to some administrative and other functional department heads, the business department mainly involves the Y business department.

    "Chinese Entrepreneur" has verified this with Jingdong. As of this writing, Jingdong official did not give a clear response and did not deny the news. However, according to the latest news, Yu Yongli has left before the Ching Ming Festival.

    In 2016, JD established the X Division and the Y Division. The X business unit focuses on intelligent logistics, while the Y business unit creates an intelligent supply chain. Among them, Y Technology Division's future-oriented technology output capability is valued by JD. However, since the second half of 2018, the volume of the Y division has gradually decreased in the channel. In the current adjustment atmosphere of Jingdong, the future of the Y division is unavoidable.

     Jingdong exchanged blood, Liu Qiangdong opened the knife to "brothers"

    Breaking the wrist

    In the personnel storm in Jingdong, the most widely discussed public opinion was the move by JD to cancel the courier's basic salary and reduce the provident fund.

    As we all know, Jingdong's logistics system and courier welfare ranks in the forefront of the industry. This adjustment will not only directly affect the courier's wage income, but also change the industry's competitive format. At the same time, the abolition of the basic salary also made the public image of Liu Qiangdong, which had a decline in reputation due to the “Minnesota incident”, more sway. After all, in May 2018, he responded to the rumor that "Jingdong will lay off 80,000 people in 10 years," said: "We will never fire any brother."

    In response, Jingdong Logistics responded that the original “floor salary + commission” salary structure has not adapted to the new business model. Since the express delivery business is operated independently, in addition to JD's own orders, there are a large number of external order business, large customer business and personal express delivery business, which can not provide sufficient incentives for employees with excellent performance.

    Although many of the couriers under Jingdong seem to be profitable and unreasonable, it is difficult to accept them. From a business perspective, Jingdong’s adjustment of the logistics compensation system does have its merits.

    Since the establishment of Jingdong Logistics in 2007, it has been the operating support system for Jingdong Mall. On the one hand, construction logistics has become the core competitiveness and moat of Jingdong. On the other hand, it also consumes a lot of costs, prompting the group to look for the energy output mode and more profit points of ToB.

    In recent years, the competition between Jingdong Logistics and SF Express and rookie has become increasingly fierce. How to compete for their respective market shares and find differentiated competitive advantages, all three parties need to have more layouts in the “personal express delivery” business.

    In the middle of 2018, Jingdong Logistics began trial operation to collect social parcels. In October of the same year, Jingdong Logistics officially launched a personal courier service and expanded its services to 31 cities. At the beginning of 2019, Jingdong Logistics announced that it will add 10,000 employees. Behind the huge team is a huge labor cost. The cancellation of the basic salary, on the one hand, can motivate the courier to take the initiative to undertake the task of the package, on the other hand, it can also greatly reduce the operating costs.

    However, at present, Jingdong's personal express delivery business does not run for a long time, and the courier generally reflects that the daily volume is less than 10 orders per day, so the income is not high. Under the premise that morale is affected, whether Jingdong can continue to maintain courier services and efficiency will take time to observe.

    On the other hand, competitor rookies are also seized the opportunity to "fill the knife."

    On the morning of April 9, the rookie announced a courier increase plan, promised to access hundreds of thousands of couriers online in the next three years, and help couriers increase their income by more than 20% by upgrading the mail service.

    Although all kinds of personnel changes have caused Jingdong to fall into the storm, in the long run, this may be just a prelude to Jingdong's future business strategy adjustment. There is no doubt that Jingdong is currently at a critical turning point.

    However, the drastic changes and decisive choices should be no stranger to Liu Qiangdong himself. He has been repeatedly proved to be a risk appetite who is not afraid to subvert himself, from the desperate attempt to build his own logistics, to the year after year to find and overthrow the executives.

    Interestingly, at this moment, he publicly expressed his understanding of Liu Qiangdong's greatest understanding. He is the "Happy Family" and the founder of Dangdang. Li Guoqing said: "The company has to abolish redundancy from high-speed growth to steady growth. Flattening and overlapping organizational mergers are effective. Chairman Liu promotes change and spirit is commendable! As long as the board of directors agrees, dictatorship is understandable."

    Li Guoqing also added a sentence: "I oppose 996 working hours, that is the boss's self-deception and deceiving superiors. All changes must be around the user, around the company's future strategic goals. Profit growth is often to satisfy shareholders, not necessarily the company's Long-term strategy."

    Hot searchJingdong Liu Qiangdong

    Editor in charge: Robot RF13015

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