China's JD.com to cut senior executives salaries by 10-20%

China's JD.com, also known as Jingdong, internationally known as Joybuy, and formerly called 360buy, said on Tuesday it would cut the salaries of its senior managers by 10-20% next year.

The step is to help pay for an effort to convert more contractors to salaried staff and provide such workers with more insurance protection.

The e-commerce giant, headquartered in Beijing, made the announcement in an internal letter, that was circulated online and reported by local media.

The e-commerce giant plans to allocate 10 billion yuan ($1.40 billion) for a fund to assist employees of JD and recently-acquired courier firm Deppon Logistics with buying homes, according to an email to staff signed by JD founder and chairman Richard Liu.

A JD representative confirmed that the letter was authentic ad reported by Reuters

"The employee benefits plan is currently being improved, with a focus on front-line staff," a JD representative told. The company has 5,40,000 employees.

Liu said the move would put short-term financial pressure on JD, leading to the decision to cut the salaries of more than 2,000 senior executives.

"I apologise to you all," he said in the letter. "If JD.com's performance returns to a high level of growth in the next two years the group will restore everyone's remuneration."

Chinese President Xi Jinping last year launched a renewed drive for "common prosperity", as an effort to reduce income inequality that threatens long-term economic growth and even the legitimacy of Communist Party rule.

Alibaba Group and Tencent Holdings last year pledged to spend billions to support the effort, while state-owned investment banks have implemented pay cuts and delayed bonus payments this year.

JD has been hit by a slowing economy and flagging consumer spending this year, though it last week posted an 11.4% rise in third-quarter revenue and said it was seeing signs of a demand recovery as China adjusted it zero-COVID policy.