Capítulo 920: Chapter 731: [Role Boundaries]

For companies, getting listed is akin to passing through a “dragon gate” threshold.

Once successful, the company undergoes a transformative metamorphosis, gaining numerous benefits.

To say the least, in terms of profit, through an Initial Public Offering, a company can raise significant capital in one go, far exceeding traditional bank loans. Additionally, listed companies can refinance through various methods such as additional share offerings and rights issues.

The equity holders of the company will see a substantial increase in their worth in a short time, and it’s not impossible for it to multiply several times.

Faced with the great benefits of being listed, many companies wanting to meet listing conditions, or just reaching the listing threshold hoping to “better meet” those conditions, will resort to various means to deceive the regulatory mechanisms, both overtly and covertly.

“As my dad says, layoffs are the simplest, most commonly used, and most efficient method,” Mo Kai said.

Such information is still somewhat sensitive to discuss, but fortunately, it’s break time now and the consulting room is not in use.

Mo Kai then moved with Nan Zhubin and Chonghui to the consulting room, reformulating the knowledge he had just learned from his father. 𝘧𝘳𝘦ℯ𝓌𝘦𝒷𝘯𝑜𝑣𝘦𝓁.𝒸𝘰𝓂

“Firstly, when a company faces a decline in profits and is struggling to meet the profit threshold for listing, human resource expenses, as one of the largest variable costs, become the most direct adjustment option.”

“Large-scale layoffs do indeed cut costs and increase efficiency in the data,” Mo Kai pursed his lips, “and in most cases, these economic layoffs do not follow legal channels but instead use means like induced resignation, re-examination dismissal… to forcibly clear out employees. Once completed, the financial data looks much better.”

“Then, many companies in their early development stages might indeed have irregularities such as not fully paying social security and provident funds, which is a major obstacle in the listing review.”

“So when listing, some enterprises, to clear obstacles, do not rectify or repay but directly lay off those, uh…” Mo Kai rephrased, “‘unqualified high-cost’ employees, avoiding potential huge repayment costs and labor disputes in the future.”

Across from Mo Kai, Chonghui and Nan Zhubin exchanged a glance.

Chonghui said, “Sounds like it’s about cutting ties with the past and pretending to be clean?”

Mo Kai nodded, “Precisely.”

Mo Kai continued, “Besides, companies might use large-scale layoffs to clear away long-service employees with high compensation costs or those holding original shares who might share the listing bonus.”

“This frees up space for new investors or the core management team to restructure interests.”

Nan Zhubin and Chonghui listened in silence.

In other words, the company layoffs seem like “income and expenditure control” and “cost-saving efficiency,” but these are just appearances.

The real purpose is the skyrocketing capital and increased worth post-listing.

And once successful, the subsequent issues caused by abnormal layoffs can be avoided through various ways — or even if they cannot be avoided and result in some losses, compared to the massive gains, these losses are insignificant.

Novelnice•com

Of course, it’s not to exclude that some SMEs don’t see the underlying logic behind these listed companies’ tactics, just knowing “layoffs can be done this way” and imitate, resulting in having the form but not the essence.

This is how some employment uproars come about.

“But now the situation of Tongping Software Company is indeed like this,” Mo Kai reluctantly said.

“In other words,” Nan Zhubin summarized, “The current management of Tongping Software Company possibly knows such layoffs don’t work, also knows such layoffs might negatively impact the company.”

Chonghui followed up, “But for greater benefits, they choose to turn a blind eye and a deaf ear.”

From the start when they sought out Boss Wang, it was bound to be in vain.

Unless something happens that threatens the listing, Boss Wang is unlikely to adjust his strategy.

But—

“Is it really impossible to happen?” Chonghui murmured.

“There have already been minor issues, but in the eyes of the upper management, these are ‘not problems,'” Nan Zhubin sighed, “and if problems are to arise, they will be big.”

Chonghui added, “Only that Boss Wang is very confident, feeling that even if what we perceive as ‘big problems’ arise, they are still like the current employee negative sentiments, problems he can handle as ‘small issues.'”

Though the statements appeared convoluted, Chonghui and Nan Zhubin understood they were on the same wavelength.

Regarding what Mo Kai just talked about, both found it intriguing. They specialize in consulting, but aren’t familiar with these intricate paths of enterprise operation.

None of the visitors in the past experienced such visitors sharing their experiences, letting them know the mysteries within.

Yet—they both understand psychology.

Their professional intuition faintly smelled the scent of danger. That seemed like the salty stench brought by the sea wind to the stone shore before the storm.

Causing Chonghui and Nan Zhubin to wrinkle their noses involuntarily.

Chonghui looked at Mo Kai, “Regarding the trouble we’re facing now, did your dad provide us with any suggestions?”

The current environment already involves other specialized fields, professional matters are handed over to professional people.

At least from the conversation just now, Chonghui could sense that Mo Kai’s father can truly impart life experiences as an elder, rather than being an ordinary intermediary.

He should be trustworthy.