Multinational credit rating company, Moody’s Corporation is reportedly planning to shut down its consultancy business in China. All the employees who are currently working in consultancy offices of Moody’s Corporation in China will be laid off as part of ending the operation in the second largest economy of the world.
People who know the shutdown and layoffs said Reuters News Agency that the company started shutting down Moody’s Analytics branches in the country on Monday. More than 100 employees who were working at Moody’s offices located in Beijing, Shanghai, and Shenzhen will be impacted by the decision of the company.
Employees were informed about the shutting down of businesses and layoffs on Wednesday in a Zoom call which was titled “Business Updates”. The move was highly unexpected by the employees as the Analytics arm of Moody’s has been performing well financially despite macroeconomic volatility.
The move to shut down the business and lay off employees comes at a time when the revenue and momentum of Moody’s Analytics in China are increasing. Apart from that, the company a few months ago launched a new product named “Risk Compass” which is focused on China.
Moody’s Analytics which was founded in 2007 is a subsidiary of Moody’s Corporation and is currently based in World Trade Center, New York City. It is also reported that the recent move by the company will have adverse effects on the reputation of Moody’s Corporation in China.
The financial services and credit rating agency said in a statement that it is taking steps to align its global workforce with economic conditions, current and anticipated. Moody’s Corporation spokesperson said in a statement that the company continues to have a strong presence in the country with various offices and establishments.
The move came as a surprise as the Analytics company has been posting good revenue and earnings in last quarter. Revenue for Moody’s Analytics in the third quarter of 2022 was $685 million, up 14 percent from the previous year. Meanwhile, the credit rating arm of the financial group, Moody’s Investors Services posted only 590 million dollars as revenue which is 36 percent lesser than what was posted a year ago.
High inflation rates and resultant hikes in interest rates across the globe have impacted businesses and financial institutions very badly. The lending of money declined sharply as geopolitical tensions and macroeconomic conditions continued to get worse.