Job cuts | Electrical giant Media Markt is planning to cut staff

Employees who were supposed to leave were invited to meetings "at short notice and without prior notice" to discuss termination agreements, said Verdi. Photo: IMAGO/Eibner Despite bubbling sales in the first nine months of this financial year, the electronics chain Media Markt and Saturn with around 17,000 employees in Germany wants to cut jobs. When asked by nd, the group based in Düsseldorf asserts that there is no connection with the planned takeover by the Chinese online giant JD.com. Verdi sees it differently. “When investors or new owners expect higher returns, savings are often made first on staff,” says a leaflet from the service union.

The Chinese government and Brussels are still arguing over the takeover details and official approvals. The deal was actually supposed to take place in the first half of this year.

Germany's largest electrical retailer, Media Markt and Saturn, whose parent company is Ceconomy AG, tells "nd": "No jobs will be lost as a result of the transaction with JD.com." But there is also no clear commitment to securing jobs. Rather, the company “regularly looks at where we can invest and where we can save costs.”

Elsewhere, Ceconomy speaks of wanting to create “more customer proximity” by deploying more capacity in “advice, sales and service”. There should be “clearer responsibilities and simpler structures” in the future.

"Anyone who doesn't sign quickly will suffer financial disadvantages."

According to information from the Verdi union, Media Markt-Saturn wants to cut jobs "depending on market size." According to Verdi, the stated goal is to reduce management and coordination levels and distribute tasks among fewer shoulders.

Verdi not only criticizes the dismantling plans, but also Ceconomy's approach. Employees who were to leave were invited to meetings "at short notice and without prior notice" to discuss termination agreements. “Anyone who doesn’t sign quickly will suffer financial disadvantages,” the leaflet says. Verdi warns those affected not to sign termination agreements carelessly.

According to Verdi, JD.com, based in Beijing, had assured last year that it would maintain the branch network for at least three years, not cut any jobs and respect collective bargaining agreements. Due to the latest reduction plans, the union is now raising doubts about this.

According to Ceconomy boss Remko Rijnders, JD.com is not dictating the upcoming job cuts. Rather, it is the case that Ceconomy “does not allow JD.com to dictate whether and where we cut jobs.” The deadline for JD.com's offer is November 10th. If the official approval from the EU Commission is not received by then, “the deal will be void.” According to Rijnders, the authorities have signaled that there will be an answer in good time.

The EU Commission has been examining for more than a year whether JD.com would finance its planned billion-dollar purchase of Ceconomy shares with the help of the Chinese state. These would be subsidies that are not permitted under European law and could distort competition in the EU internal market. China is now accusing the EU of demanding “extensive and unnecessary information” about sensitive data and is threatening countermeasures if it continues the investigations. 

But headwinds are not only coming from Brussels. An investment review is underway in Austria, where Media Markt-Saturn is also represented. The government is assessing the consequences for public order and national security of a possible Chinese takeover. Vienna also has to approve the deal so that it can be finalized.

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