According to a Jianye Group internal announcement obtained on Feb. 10, the company plans to streamline its departments, keeping around 410 staff, a reduction of more than 650 people, or 61.2%.
Its property sales have declined since July 20, with sales and returns reduced by nearly $470 million compared to its original plan, with accumulated economic losses of more than $790 million.
Jianye Group owns four listed companies with businesses in many sectors, covering real estate, smart manufacturing, technology, cultural tourism, hotels, agriculture, soccer, and finance.
Still, it is overly dependent on the Henan market. The 2020 Jianye Group annual report shows that sales in Henan accounted for 99% of the company’s sales. Revenues from Zhengzhou Jianye, one of its four businesses, were $2.41 billion, accounting for 22% of 2020’s total sales.
Zhengzhou, Henan, was hit by a heavy rainstorm on July 20, 2021, causing severe damage to Jianye Group’s cultural tourism project.
In September 2021, a document circulating on the Internet shows the Jianye Group asked the Chinese regime for help. A screenshot of the record showed that several of Jianye Group’s projects were halted or partially halted due to the flooding and epidemic. But it still pays vast operating costs and incurs operating losses of $47.16 million.
Jianye Group and other Henan real estate companies are suffering from the market downturn. For example, Beyuan Holdings and Hanyu Group gave their employees three months’ leave with an unknown return-to-work date.
Sales of mainland real estate companies have been declining since last year under a crackdown by the China authorities.
A Henan real estate dealer said some of his friends went south to Shenzhen to find jobs, and many others have changed careers.
Wang, a Shanghai property development manager, said that there would be a new wave of layoffs in March and April.