(Yicai) Oct. 30 -- Chinese startup Hozon Auto, which produces electric vehicles under the Neta brand, has confirmed plans for redundancies and organizational changes at the marque in the wake of a sales slump.

The confirmation follows an online rumor about salary cuts for Neta’s research and development staff, with those earning over CNY1 million (USD140,450) set for a 30 percent drop, while other workers face cuts of between 5 percent and 20 percent.

Hozon said day-to-day operations are proceeding smoothly and that the Shanghai-based company is actively delivering new vehicles to customers. The firm also plans to participate in the upcoming Guangzhou Auto Show, it added.

Neta announced yesterday an allocation of 5 percent of its shares, worth about CNY2 billion (USD281 million), as part of an employee incentive plan. New salary and performance assessment frameworks have been introduced internally as well.

Neta has been struggling in China’s fiercely competitive EV market, with total sales falling by 16 percent last year to 120,000 units. There was a further 12.1 percent drop in the first nine months of this year to 86,000. The company has faced reports of delayed salaries and bonuses in February and again in September this year. 

Founded in 2018, Neta has completed 14 funding rounds, yet it reported a cumulative loss exceeding CNY18 billion (USD2.53 million) from 2021 to 2023. Its parent company filed for an initial public offering in Hong Kong on June 26, but there has been little progress with the listing since then.

Editor: Tom Litting