Report: China Unicom to start 'unprecedented' slimming

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After unveiling mixed-ownership reforms last month, China Unicom, one of China's three major telecom operators, is planning to cut off at least 30 percent of its management team by the end of October, Beijing-based media outlet Caixin reported Friday.

The slimming plan will downsize Unicom's 712 management departments across the country to about 516, the report said, quoting insiders who described the shake-up as "unprecedented".

The telecom giant began reducing 27 management departments to 20 in its headquarters in Beijing, cutting the number of employees holding officially budgeted positions from 1,787 to 891.

Officially budgeted positions, nicknamed "iron rice bowls", are considered highly guaranteed jobs. However, many Chinese State Owned Enterprises have been reducing these types of jobs as part of ongoing reforms to increase efficiency.

"The principle of the slimming plan is to break the 'iron rice bowl'," said an unnamed source with knowledge of Unicom's downsizing plan, according to Caixin.

But there will not be massive layoffs, reported Nanfang Metropolis Daily, citing an anonymous insider, "They will be transferred to other positions."

In the next two years, about three percent of employees will move positions within the company and one percent, about 2,000 employees, will leave Unicom, the report said.

Two weeks ago, Unicom announced it was selling a 35.19 percent stake in its Shanghai-listed unit to private investors, as part of a pilot mixed-ownership reform scheme China designed for large SOEs.