Nearly 10,000 employees quit or shifted to the franchise model, enabling Vinasun to save over VND1 trillion ($44 million).
Vinasun Corporation has just announced that the number of the company’s employees was 7,117, down 10,000 compared to early 2017.
In the first quarter of 2017, the company reported that 4,239 employees quit due to “unfair competition” from Uber and Grab. By the end of the third quarter, this number declined by 2,000. This number of employees leaving or transferring to be franchise staff (who are not counted as direct employees of Vinasun) is considered a new Vietnamese record.
The business results of Vinasun have changed significantly. The financial report for the fourth quarter recorded a net revenue of VND486 billion ($21.4 million), down 55 per cent (equivalent to $26 million) on-year as corporate management costs doubled from VND33 billion ($1.45 million) to VND65 billion ($2.86 million). Thanks to the revenue from the liquidation of fixed assets and advertisements of VND96 billion ($4.23 million), Vinasun avoided a million-dollar loss.
The gross revenue from sales and services, which hit VND2.937 trillion ($129.4 million), down 35 per cent on-year, is the lowest recorded in the last four years. Transport by taxi still contributed the lion’s share with over VND2 trillion ($91 million), capturing 70 per cent of the total revenue (from 98 per cent before), and franchising made VND566 billion ($25 million).
Thanks to cutting down the number of employees, Vinasun saved over VND1 trillion, but pre-tax profit was still only VND245 billion ($10.8 million), signifying a 38 per cent reduction on-year. Against the backdrop of weak purchasing power and heavy competition in Ho Chi Minh City, as well as the increasing price of gasoline and oil, surpassing the VND205-billion profit target counts as success in the company’s book.
At the end of 2017, the total debts of Vinasun declined by VND450 billion ($19.8 million) to VND1.176 trillion ($51.8 million) as long-term financial loans were paid off. The value of the debts due in 2018 is around VND365 billion ($16.1 million).
Company leaders have just announced that the Ho Chi Minh City’s People’s Court will open the first instance hearing of a claim for damages between Vinasun and GrabTaxi Vietnam Co., Ltd. on February 6.
Currently, Vinasun has collected all the evidence, including documents, images, and videos to prove that Grab violated commercial competition law by devaluation, particularly by staging promotions for more than 90 days per year.
Source: Nguyen Huong