Overseas Chinese Town reduces staff by 8,652 people

(Source: Real Estate Whale Falls)

From 2017 to 2025, China Overseas Land & Investment’s total number of employees was reduced from 25,130 to 16,478, a net reduction of 8,652 people, with a layoff ratio as high as 34.43%. This profound change is not an isolated incident, but a concentrated reflection of the dual pressures brought by dramatic cyclical shifts in the real estate industry and the company’s own strategic life-and-death transformation. It marks the company’s complete shift from a leverage-dependent scale expansion to a quality-driven restructuring for survival.

I. Macro Background: The End of the Industry’s Golden Age and the Pain of the Black-Iron Era

This period covers the entire process of China’s real estate industry sliding from its peak into a deep adjustment. Around 2017, although the industry was at a high point, regulation had already reached a stage of implementation, and “housing is for living, not for speculation” became a long-term national policy. Entering the 2020s, the old model of high leverage and high turnover was completely broken down. Market credit was reconstructed, and sales shrank significantly. Real estate leaders that are also central SOEs, such as Poly Developments and China Merchants Shekou, also downsized during the same period. However, China Overseas Land & Investment’s reduction of more than one-third still ranks among the top in the industry, which is directly related to its unique business model and a more severe financial situation.

II. Core Drivers: A Survival Crisis Under Continuous Massive Losses

The most direct driving force behind the downsizing is enormous financial pressure. After the company first recorded an attributable net loss of 10.905 billion yuan in 2022, it fell into a quagmire of losses. In 2023, losses were 6.492 billion yuan; in 2024, they expanded to 8.662 billion yuan; and in 2025, it suffered a further massive loss of 14.496 billion yuan. Cumulative losses over four years exceeded 40.5 billion yuan, and net assets were greatly depleted. Under these circumstances, labor costs, as one of the largest controllable expenditures, naturally became the primary target for “stopping the bleeding.” By streamlining organizations, the company’s total compensation fell sharply from its peak period, forcing per-capita efficiency into a reshaping channel.

III. Strategic Transformation: From a Heavy-Asset Model of “Using Property to Support Tourism” to “Carving Out the Rot and Removing the Toxin” Self-Reinvention

The downsizing is a manifestation in organizational terms of China Overseas Land & Investment’s difficult strategic turnaround. In its traditional “cultural tourism + real estate” model, cultural tourism projects required huge investments and had long development cycles, and it relied heavily on real estate sales to feed back and support operations. When the real estate engine began to lose speed, the entire business model became unsustainable. Since 2022, the company has launched a deep transformation of “de-real-estating and strengthening operations”:

1. Extreme contraction of investment: new land investment plunged from nearly 50 billion yuan in 2019 to zero new additions in 2024, completely halting land acquisition in public markets.

2. Large-scale disposal of assets: it continued to sell multiple assets, such as the Shanghai Bulgari Hotel and equity in Xi’an subsidiaries, to raise cash and offload burdens.

3. Restructuring of the organizational setup: it promoted “strong headquarters, weak major regions, and strong districts,” merged regional companies, compressed management layers, and improved decision-making efficiency. Downsizing was mainly concentrated in traditional lines such as real estate investment, development, and marketing, while positions in cultural tourism operations and digitalization were required to be retained and even strengthened—reflecting a shift in business focus.

IV. Adjustment Outcomes: A Breathing Space for Cash Flow and Optimization of the Debt Structure

This bruising downsizing and reform have given China Overseas Land & Investment crucial survival room. The most notable results are reflected in cash flow: the company’s net cash flow from operating activities turned positive in 2023, reaching 3.423 billion yuan; it improved to 5.362 billion yuan in 2024; and in 2025 it surged to 12.501 billion yuan, achieving positive results for three consecutive years. This provides a lifeline for repaying debts and maintaining operations. At the same time, the debt structure was optimized: within interest-bearing liabilities, the proportion of medium- and long-term borrowings increased, the average financing cost fell to 3.25%, and the pressure on short-term debt repayment was eased to some extent.

V. Management Changes and Future Direction: The Challenges of the Wu Bingqi Era

In September 2025, Wu Bingqi, who has deep ties to the China Resources (CRC) system, took over as chairman, marking China Overseas Land & Investment’s entry into a new management phase. The core approach he brings is “cash is king” and “lean operations.” It is expected that it will further strengthen asset revitalization, expand light-asset output, and control costs. Under his leadership, the company’s future focus will be: to firmly hold the safety bottom line for cash flow, improve cultural tourism business quality and efficiency, expand into light-asset areas, and in the real estate sector seek extremely prudent structural opportunities.

In summary, this 34.43% personnel reduction is a difficult yet necessary “slimming down” for China Overseas Land & Investment as it faces the industry’s icy winter period. It comes with severe pain in performance and business contraction, but it also brings the possibility of improved cash flow and greater strategic focus. This deep adjustment indicates that, for a group of real estate companies represented by China Overseas Land & Investment, their survival logic has completely shifted—from pursuing scale to forging resilience that can withstand cycles. Whether the future succeeds or fails will depend on whether the space gained through this “slimming down” can be effectively used to cultivate truly sustainable profitability and operational advantages.

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