Following Major Organizational Restructuring, Li Auto Initiates Workforce Optimization

On April 7, Li Auto underwent a new round of organizational restructuring, and on April 22, Li Auto announced a price reduction for the first time in its history, with an official decrease of 18,000 to 30,000 yuan for all models except the L6.

According to an exclusive report by Chinese media 21st Century Business Herald, after China’s May Day holiday, Li Auto is undergoing a new round of company-wide workforce optimization, with an overall optimization ratio of over 18%. The 2023 financial report shows that Li Auto has nearly 31,600 employees, a year-on-year increase of 63%. Based on the optimization ratio, this round of optimization involves more than 5,600 people.

Specifically, more than 400 people in the sales and service operations department will be optimized, the recruitment department will be reduced from over 200 people to 40-50 people, and the smart driving team will be reduced to less than 1,000 people.

In 2023, Li Auto delivered a total of 376,000 vehicles, with a net profit of over 11.8 billion yuan, making it the third profitable new energy vehicle company after Tesla and BYD.

In early March, the sales of MEGA and the new L series did not meet internal expectations. MEGA’s ambition is to become the “No. 1 model with a sales volume of over 500,000”, regardless of energy form or body form. However, according to various reports, its sales volume in the past month was only 671 units. The L7, 8, and 9, which achieved a monthly sales of 50,000 at the end of last year, sold less than 30,000 in the first four months of this year.

Although in the first quarter, Li Auto‘s sales growth rate (52.9%) outperformed the overall market (31%) in the new energy vehicle market priced above 300,000, and it is still the first in terms of sales volume among new forces in this price range, at the end of March, Li Auto still lowered its sales forecast from 800,000 units to 560,000-640,000 units considering various factors.

After lowering the sales forecast, the originally equipped personnel also need to be reduced accordingly. At the same time, Li Auto also announced a price reduction for all models. The price reduction will affect gross profit, and workforce optimization is a key step that Li Auto has begun to take responsibility for operations.

The departments with more optimizations this time are the recruitment department, sales and service operations department, and intelligent driving department, etc.

An employee of Li Auto revealed that several employees he came into contact with were “notified of optimization on the same day and left on the same day”.

When recruitment needs decrease, the recruitment department is the first to be optimized. The recruitment department expanded to over 200 people at the end of last year, and the entire department is now down to less than 50 people, with only 20-30 people in social recruitment still in office, and the department’s layoff ratio is over 70%.

In the sales and service group, the “Sales and Service Operations” department is mainly responsible for used cars, network expansion, network planning, and other services that match sales. In July 2023, the team size was less than 200 people. After Li Auto‘s monthly sales exceeded 30,000 units last year, it expanded rapidly, and this department had expanded to nearly a thousand people at the beginning of this year. However, because the front-line sales did not meet expectations, they now received a layoff target of optimizing more than 400 employees.

SEE ALSO: Starting from 219,900 Yuan: ONVO’s First Car L60 Starts Pre-Sale