F-TECH Workforce Reduction in China to Improve Profitability Amid NEV Market Shift

F-TECH announced on August 3 that it will reduce its workforce by approximately 500 employees across its consolidated subsidiaries in China as part of a broader effort to strengthen the profitability of its regional operations. The workforce reduction will affect F-TECH Zhongshan Inc. in Guangdong Province and F-TECH Wuhan Inc. in Hubei Province. Employment contracts will be terminated through consultations with affected employees, with departures scheduled to be completed by August 31.

The decision reflects structural changes taking place in China's automotive industry as the market continues shifting toward new energy vehicles (NEVs), including electric vehicles. At the same time, the competitive landscape has evolved, leading to lower production volumes from major customers served by the two subsidiaries. As a result, the existing production structure at both facilities no longer aligns with current manufacturing demand, prompting the company to reorganize its workforce.

According to the announced schedule, the consultation process for workforce reductions at F-TECH Zhongshan Inc will take place between August 3 and August 19. The corresponding process at F-TECH Wuhan Inc will be conducted from August 18 through August 31. The company stated that these measures are intended to rebuild the operational foundation of its Chinese business while improving long-term profitability.

F-TECH also confirmed that it expects to recognize expenses related to special lump-sum retirement payments in its consolidated financial results for the fiscal year ending March 2027. The estimated costs have already been reflected in the company's current earnings forecast to the extent they can be reasonably calculated.

The company noted that the final financial impact will depend on the number of employees who participate in the program and the actual payment amounts. After reviewing those figures, F-TECH said it will revise its earnings forecast if adjustments become necessary.

Frequently Asked Questions

Why is F-TECH reducing its workforce in China?
F-TECH is reducing approximately 500 positions because its Chinese subsidiaries have been affected by lower production volumes from major customers and significant structural changes in China's automotive market driven by the transition to new energy vehicles. The company believes reorganizing its workforce will better align production capacity with market demand, improve profitability, and strengthen the long-term business foundation of its operations in China while adapting to evolving industry conditions.

Which F-TECH subsidiaries are affected by the workforce reduction?
The workforce reduction applies to F-TECH Zhongshan Inc. in Guangdong Province and F-TECH Wuhan Inc. in Hubei Province. Employee consultations will be conducted during August, with departures scheduled to conclude by August 31. The company expects to record related retirement payment expenses in its consolidated financial results for the fiscal year ending March 2027 and may revise its earnings forecast depending on the final participation level and payment amounts.