Moody's closing its consulting business in China, laying off staff

WASHINGTON: The US-headquartered credit rating firm, Moody's Corp is shutting it's China consulting business and is laying off its staff. Two people with knowledge of the matter said that Moody's Corp is laying off people associated with the unit in multiple locations across the country, reported The News International.

Moody's Corp started winding down the business, Moody's Analytics, in China this week, the people said on condition of anonymity as they are not authorised to speak to media. First announced internally on Monday, the move has affected more than 100 employees across Moody's Beijing, Shanghai and Shenzhen offices, one of the sources said, reported The News International.

The total headcount for the business unit could not immediately be ascertained. Moody's credit rating business will continue to operate in the world's second-largest economy, the source added. Moody's had flagged in a recent earnings call that it was "taking steps to align our global workforce with current and anticipated economic conditions," a company spokesperson said in an emailed statement.

Notably, China's zero-Covid policy and its sporadic lockdowns are pushing multinational firms from its lands to different countries, a media report said citing the report of the European Union Chamber of Commerce. Recently, in September, the EU Chamber of Commerce released a report that China had become less predictable, less reliable, and less efficient, resulting in several multinational firms considering shifting their operations out of China to other markets, Financial Post reported.

According to a European Chamber of Commerce survey, 50 per cent of western firms reported that business in China had become more politicised in 2021 than it was in earlier years. "Increasing number of European businesses are putting China investments on hold and re-evaluating their positions in the market as they wait to see how long this uncertainty will continue, and many are looking towards other destinations for future projects," Vice President of the European Chamber Bettina Schoen-Behanzin was quoted by Financial Times as saying.

In 2022, the shift of multinational companies from China shows that there is a decline in trust, according to Financial Post. On October 3, American tech giant Google (local time) announced that it was shutting down the Google Translate service in mainland China, citing low usage in the country, as per reports.

With this Google's announcement, the American tech giant was also added to the list of other companies that left China. Amazon, LinkedIn, Yahoo, and Microsoft are some of the companies that pulled out their operation in China. Meanwhile, droves of migrant workers have been fleeing back to their hometowns from the country's largest iPhone factory in Covid-hit Zhengzhou, amidst a lockdown triggered by the Covid outbreak.

"Workers have broken out of #Apple's largest assembly site, escaping the Zero #Covid lockdown at Foxconn in #Zhengzhou. After sneaking out, they're walking to hometowns more than 100 kilometers away to beat the Covid app measures designed to control people and stop this. #China," tweeted Stephen McDonell, BBC's correspondent in China. Videos shared on Chinese social media showed people jumping a fence outside the plant, owned by manufacturer Foxconn, in the central city of Zhengzhou.

It was previously reported that a number of workers had been placed under quarantine because of an outbreak of the disease. According to McDonell, Zhengzhou Foxconn hires approximately around 300,000 workers and makes half of the world's iPhones. Amidst Covid lockdown chaos and food shortages, videos on Douyin, a Chinese video-hosting service show many migrant workers from within Henan province returning home on foot... as no public transport is available due to the lockdown.