The latest financial report from MWG, a leading mobile phone retailer in Vietnam, reveals an interesting trend. As of Q2 2024, the company reported a total of 59,478 employees, a significant reduction of 5,936 from the start of the year and 8,548 from the same period last year.
Despite this downsizing, MWG’s total staff costs increased by nearly VND 1,000 billion compared to the previous year, reaching VND 4,760 billion. This equates to an average monthly expenditure of approximately VND 13.4 million per employee.
This development coincides with the closure of 156 MWG stores in June alone. Specifically, the Tech World Mobile chain (including Topzone) decreased by 24 stores, leaving 1,046 in operation. The Dien May Xanh electronics chain (including Dien May Xanh Supermini) witnessed a more substantial reduction of 87 stores, bringing the total to 2,093. Furthermore, the Ankang pharmacy chain contracted by 45 stores, resulting in 481 remaining outlets.
A closer examination of MWG’s history reveals that this recent downsizing trend is the most significant in the past two years. The company has previously undertaken notable closures, such as the shutdown of 215 Bach Hoa Xanh grocery stores in June 2022 and an additional 154 stores in July 2022. In November 2023, they also closed 58 Tech World Mobile stores and 71 Dien May Xanh stores.
When considering individual chains, this downsizing event marks the most extensive closure in the history of Dien May Xanh and Ankang. It also stands as the second-largest closure month for the Tech World Mobile chain.
During an investor meeting in May, Mr. Nguyen Duc Tai, Chairman of MWG’s Board of Directors, provided insights into the company’s strategy behind the staff reduction. He attributed the decrease to a “less is more” approach, emphasizing a focus on performance and quality over quantity. Mr. Tai acknowledged that employees may have left due to dissatisfaction with their income, but he also noted that the attrition rate for involuntary resignations was very low. The reduction, he explained, is a natural occurrence affecting positions from lower to middle and higher levels across all areas of MWG’s operations.
MWG’s financial performance in Q2 2024 showed positive growth, with a revenue of VND 34,234 billion, a nearly 16% increase year-over-year. After expenses, the company reported a remarkable surge in profits, with a pre-tax income of VND 1,513 billion and a net profit of VND 1,172 billion, representing a staggering 6,800% increase compared to the same period in 2023. This marks the fourth consecutive quarter of positive growth for the retailer.
