Pay cut sparks protest against Shanghai bank unit’s IT vendor

On Thursday afternoon, numerous workers held a rare strike in mainland China against a vendor over a dispute about salaries and benefits. The event has become widely known as it has gone viral, adding to growing concerns among the public about a sluggish economy.

The incident occurred due to a conflict that arose by the company that offers information-technology (IT) services to Shanghai Pudong Development Bank (SPDB). It started when an employee from the wealth-management division of the bank raised an issue regarding a significant pay cut of almost 70 per cent in a WeChat post. The post was widely spread on the Chinese social media platform and struck a chord with the IT vendor’s staff, who subsequently expressed their own grievances.

The viral post revealed that the employee’s monthly salary dropped from 20,000 yuan to approximately 6,000 yuan. 

To this, the SPDB confirmed the pay cut mentioned in a WeChat post by an employee and stated that the cut was due to a failure to pass a performance review. A senior executive from the management explained how the company’s salary mechanism is performance-based, and it is not unusual for underperforming employees to face a 70 per cent reduction in pay. The bank also released a statement that the management and staff members of the vendor trying to reach a mutual understanding.

Shanghai Pudong Development Bank, a lender governed by the Shanghai government, experienced a decrease in profits last year, with net earnings dropping to 51.2 billion yuan, a decline of 3.5 per cent from the previous year. SPDB’s profits have declined for three consecutive years, and it is the only mainland China-listed bank that reported a decrease in both revenue and profit in 2022.