A growing number of Inspur Cloud employees are seeing their paychecks shrink dramatically under the company's newly introduced monthly assessment rules.
Several staff members have revealed that the firm has begun enforcing a 50-50 split between base salary and performance-based pay, replacing the previous structure that guaranteed 90% of wages as fixed income.
Under the new policy, an employee earning 10,000 yuan per month could take home less than 5,000 yuan after social insurance and housing fund deductions, according to multiple sources who spoke with our team. The majority of workers are facing a pay reduction of roughly 30%, with many expressing frustration but feeling powerless to push back.
The new compensation model has already taken effect in the latest payroll cycle. One employee, identified by the pseudonym Li Lei, described the shift: "Previously, it was 90% fixed salary plus 10% performance. Now it's 50% fixed and 50% performance, so income certainty has dropped sharply."
Li Lei explained that even if an employee's personal performance is flawless, failing to meet departmental or company targets triggers automatic deduction of the corresponding bonus portions. "Based on historical results, most departments rarely hit their targets, and the company rarely achieves its goals either. That means 30% of our salary could be withheld," he noted. "The 200% bonus cap is essentially unreachable, so in practice it's 0%."
Where the money goes
According to an internal document titled "Monthly Assessment and Compensation Structure Adjustment Notice" obtained by our team, the performance-linked portion of an employee's salary is broken down into three tiers. The first 10% of monthly salary is tied to overall company profitability, with no payout if the company posts a loss. The second 20% is linked to departmental performance, requiring the department to meet its targets. The third 20% depends entirely on individual monthly assessments, with payout factors determined by rating and score.
Employees report that the assessment results released in recent days already reflect this new calculation method, with most workers losing at least 30% of their pay. When approached for comment, Inspur Cloud did not respond before publication.
Layoffs and resignation queues
The pay restructuring at Inspur Cloud is part of a broader trend across the entire Inspur Group. Sources indicate that Inspur Software has also shifted to a 70% fixed and 30% performance structure over the past two months, with that 30% further split among personal, departmental, and company-level metrics.
Many employees view this change as an unfair transfer of business risk onto workers. "Essentially, the company is offloading its operational risk onto ordinary employees," one staffer remarked, though they acknowledged having little recourse.
Alongside the pay changes, Inspur has conducted significant headcount reductions. A former employee, using the pseudonym Xia Lin, revealed that before June 30 of this year, the group launched a substantial workforce optimization affecting multiple subsidiaries, with Inspur Cloud cutting more than 30% of its staff. In June, screenshots circulated on social platforms showing workers at Inspur receiving "queue numbers" to process their departures, with more than ten people waiting by mid-morning on a single day.
"The company doesn't want to pay severance, so they make it difficult for people to leave voluntarily," one worker alleged. A lawyer who has been advising Inspur Cloud employees confirmed an uptick in labor arbitration inquiries, noting that while each case differs, they all revolve around salary and performance adjustments. Under Article 35 of China's Labor Contract Law, any change to employment terms requires mutual agreement; unilateral enforcement by the employer carries no legal binding force. The attorney suggested that affected employees could consider legal recourse.
The long road to IPO
Amid the internal turmoil, Inspur Cloud's long-delayed initial public offering remains a pressing concern. In July, CITIC Securities submitted the 17th progress report on Inspur Cloud's listing preparation to the Shandong securities regulator, yet approval remains uncertain after repeated filings since the company first signaled its intent to list on the STAR Market in 2019.
After completing its initial coaching phase in 2020, Inspur Cloud never submitted its application, and subsequent attempts have not been formally accepted by the Shanghai Stock Exchange. The repeated setbacks reflect complex internal governance issues, including convoluted equity structures and shifting relationships between subsidiaries.
For instance, in 2020, Inspur Software Group was transferred from being Inspur Cloud's parent company to its subsidiary. Then in September 2024, the arrangement was reversed, with 51% of Inspur Software Group equity moving back to Inspur Group, making the two entities "sibling companies." This back-and-forth highlights the fluid nature of business boundaries and asset ownership within the conglomerate.
Regulatory filings consistently cite related-party transactions as a key focus of ongoing rectification. Inspur Cloud engages in substantial hardware purchases from affiliate companies such as Inspur Information, and while advisors argue these transactions are commercially reasonable, the level of interconnected reliance remains a scrutiny point for regulators.
One person familiar with multiple Inspur business lines admitted: "The internal structure is extremely complex, with many subsidiaries. Even insiders are often confused."
Leadership under fire
Inspur Cloud is led by Chairman and CEO Xiao Xue, who also serves as executive president and chief engineer of Inspur Group. The new compensation policy has drawn sharp criticism, with some employees accusing him of leading the workforce "into poverty despite being an engineer" and others calling for his resignation.
While the pay restructuring may be an attempt to trim costs and streamline operations ahead of a potential listing, the deeper governance challenges—recurring equity overhauls and heavy reliance on related-party deals—will ultimately test both Xiao Xue's leadership and Inspur Cloud's prospects of going public.
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