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China: Canon’s Large Severance Packages Make Chinese Think Again

Canon Zhuhai Co., Ltd., a subsidiary of Canon located in Zhuhai, China, announced its closure and a large severance package for departing employees. The minimum severance for each employee is 300,000 yuan ($47,381), and management staff can receive up to one million yuan ($157,938) in compensation. It has caused Chinese netizens to speak up about the "conscience enterprise" and the culture of gratitude.
Juliet Wei
Juliet Wei covers China news and U.S.-China relations and has worked as a correspondent with Senate and House Correspondent Credential at Washington DC. She holds an M.A. in Specialized Journalism from the University of Southern California.
Published: January 25, 2022
Canon Zhuhai Co., Ltd. announced its closure and its high compensation for departing employees.(Image: screenshot of video online)

Recently, Canon Zhuhai Co., Ltd., a subsidiary of Canon located in Zhuhai, China, announced its closure and a large severance package for departing employees. 

The minimum severance for each employee is 300,000 yuan ($47,381), and management staff can receive up to one million yuan ($157,938) in compensation. It has caused Chinese netizens to speak up about the “conscience enterprise” and the culture of gratitude. They ask, “How many Chinese companies can do so?” and wonder whether the country’s state or government-owned enterprises can treat their departing employees with the same level of generosity and kindness.

The hatred of Japan — that the Chinese Communist Party (CCP) has been promoting for many years — seemed to collapse immediately after Canon Zhuhai’s announcement. The fact that a Japanese Company closed its factory yet provided a generous compensation package to its Chinese employees, caused heated discussions on the Internet.

Feelings of gratitude

On Jan. 12, the world’s camera giant announced that due to a shrinking global camera market and the ongoing COVID-19 pandemic, the company had to make a difficult decision and terminate the company’s production in Zhuhai.

On Jan. 16, Canon Zhuhai released a statement titled, “The Announcement on the Negotiated Plan for the Termination of Labor Contracts” for employees. The statement informed employees that as of Jan. 23, all employees would be dismissed and compensated.

The announcement circulated on the Internet, which spelled out a priority plan that includes five parts: economic compensation, exceptional consolation, employment support, the award for forever gratitude and remembering, and red envelopes for employees to return home for the Chinese New Year. 

Some netizens estimate that employees with ten years of service may receive more than 300,000 yuan ($47,381) in compensation. The compensation standards set by Canon are higher than those stipulated by Chinese law.

In an online video, a former employee said, “although Canon’s factory is closed, everyone is grateful to each other and remembers each other. You work for us, and we compensate for it. Farewell! Canon. The gratitude is everlasting.”

Another internet video host said, “Canon gives employees 300,000 severance pay per employee. Employees are reluctant to part and bid farewell to the factory in tears.”

“Canon is gone. Where can we find such a good factory and such a good boss? It is the state of mind of the employees. In the past, the ‘Pink 50–cent’ put the parties of the labor and capital in opposition. I think that it was all nonsense. The labor and the capital sides are an interdependent relationship,” another commenter said.

“50-cent” or “wumao”, are terms for Internet commenters who are hired by Chinese authorities to manipulate public opinion and disseminate disinformation online, for 50 cents per post, to the benefit of the governing Chinese Communist Party.

“30 years, got together well and bid farewell well. They offered five compensation plans. There is especially a fifth one, ‘the award for forever gratitude and remembering.’ I guess that it has never been heard of in any of the Chinese companies,” the host of the video added.

Turning words into action

Over the past couple of years, many enterprises in China have opened up, closed down, or moved out creating a problem of severance for employees. In contrast to domestic companies laying off employees without paying a penny of compensation or lacking humane care, Canon Zhuhai’s high compensation and gratitude culture is a welcome change and has triggered widespread responses online.

In an online video a commenter said, “Dingdong Grocery, an app for buying vegetables in China, is laying off employees on a large scale, saying that employees should leave their jobs on their own; otherwise, the company will state that the employee has failed in the probation period, and see what can you do. This kind of threatening dismissal of labor relations is unique.”

“Where is the goodness of this so-called high-techs? Where is the humanity of this app? Using this threatening method to terminate the labor relationship, how can they serve customers well? Who wants to use such an app to buy vegetables? So, there must be a reason why such a company can’t continue,” the commenter added. 

“No matter which government, don’t listen to how loud its slogans announced, just see if it eventually does practical things for the people. It is the most basic standard to measure,” said another commenter. 

“A few years ago, Chinese companies bought out their seniority and paid their worker several tens of thousands of Yuan and let them go once and for all. Let’s compare then. While one is making noise all year long to beat up little Japan, just see how many companies in our powerful country are like this [Canon]? Can China’s state and government-owned enterprises reach this level? If they did, then they could claim to have the socialist superiority,” the commenter said.

Another poster commented, “The Compensation for every employee over 300,000 yuan, which is unheard of for the working class and can’t even dare to dream of it. Capitalist companies have done it. Canon’s move was a sound slap on the face of those 50-cents and pink wolf-warriors.”

A netizen named “Wenqing Wang” left the message, “In 2019, I resigned from one of the four major state-owned banks. I have worked there for 26 years, and the compensation  is 1,800 per month unemployment insurance for two years, that’s all.”

A netizen named  “Ah-ting” commented, “This reminds me of the plots that often appear in Chinese online novels (omitted)… Whenever I see such plots, I always find it sad and ironic:  In the story, they constantly describe how bad the ‘foreign forces’ are, but in the real world, only the ‘foreign forces’ they hate are treating them well. It is a great irony and joke…”

Huawei employee who asked for compensation detained for 251 days

A netizen named “Leo Thunder” wrote a post reminding people about the outcry following a former Huawei employee’s treatment: “Huawei laughed at what Canon did without saying a word. After all, the employee who dared to ask the company for compensation has been detained for 251 days.”

On Dec. 5, 2019, the New York Times Chinese website published an article titled, “How Huawei Lost the Heart of the Chinese Public?”  

The article pointed out the backlash triggered by the treatment of a former Huawei employee, Li Hongyuan, who was detained over a labor dispute. The article argues that the anger over the incident on Chinese social networks reflects the fear among many middle-class professionals that what happened to Li Hongyuan might very well happen to them.

“On the Twitter-like social media platform Weibo, many users posted the numbers 985, 996, 251, and 404 in the comment section below her letter. They were slyly referring to a former Huawei employee who graduated from one of China’s top universities in a program code-named 985, worked from 9 a.m. to 9 p.m. six days a week and was jailed for 251 days after he demanded severance pay when his contract wasn’t renewed, ” the New York Times reported. 

Li’s story went viral in China, generating angry responses online that resulted in 404 error messages on articles about his story. Comments on the articles were deleted and are no longer searchable, a sign of China’s censorship at work. 

Li Hongyuan was eventually acquitted and received 100,000 yuan ($15,794) in state compensation. He shared his story online when Huawei’s reputation began to take a hit.

According to Chinese media interviews with Li Hongyuan, he worked for Huawei for 12 years and negotiated with the company in March 2018 to receive 300,000 yuan ($47,381) in severance compensation. In addition, the company did not give him a year-end bonus, which he said the company had promised him. In November 2018, he sued Huawei.

A month later, Li Hongyuan was criminally detained in Shenzhen and charged with divulging trade secrets. In January 2019, he was arrested on charges of racketeering. He was acquitted in August because his wife presented audio files of his conversation with Huawei management.

Huawei insisted in a statement that it had done nothing wrong. “Huawei has the right and obligation to report suspected illegal acts to judicial authorities based on facts,” the company said, adding that, “If Li Hongyuan believes that his rights and interests have been harmed, Huawei supports him in using legal weapons to defend his rights and interests, including suing Huawei.”

Online commenters called Huawei’s statement “arrogant” and “cold-blooded,” the New York Times reported.