Companies reshape business models to cope with coronavirus aftermath
Teng, a salesperson at a small private business consultancy firm in central China's Wuhan City, said she has been on minimum wage since late February.
The company, based in the former epicenter of the coronavirus pandemic, provides corporate training to firms. But many of its ongoing projects are suspended now because employees cannot travel to provide the on-site training sessions.
As contracts specify that payment for its services is only due upon the completion of each training project, the company is now facing a severe capital shortage to cover its operational expenses, of which the majority goes to paychecks for its employees.
Meanwhile, as some large training projects span a long period of time and uncertainties on when those suspended projects would resume still linger on, the debt-stricken company can only expect substantial revenues much later than previously planned.
Teng is among millions of workers in China feeling the impact of the coronavirus. As companies in retail, education, food and service industries are hit hard by business shutdowns, some are imposing hiring freeze, salary cut or readjusting employees' welfare package to cut down costs.
In a survey by the China Association of Small and Medium Enterprises, 86.5 percent of the companies said their businesses are affected by the coronavirus pandemic, among which 30 percent said the impact is significant. Cash shortage is cited as the biggest difficulty that small- and medium-sized enterprises face, with nearly 90 percent saying they will run out of cash in three months.
Small- and medium-sized businesses contribute more than 60 percent to the country's economic growth and employ more than 80 percent of workers in China, according to statistics reported last year.