Employees quit, Mobile World collects shares at 16% of market price

Mobile World Investment Joint Stock Company (MWG) has just reported the results of the repurchase transaction of 431,179 treasury shares in December from employees who resigned. This is the number of shares they can buy under the employee option program (ESOP).

Thus, MWG only spent 10,000 VND for one ESOP share to buy back, equal to the par value and equivalent to only one-sixth of the average market price of this stock from the beginning of December until now. They stated in the report that the average transaction price is calculated according to the issuance regulations. Meanwhile, a MWG share closed this week’s session at 61,500 VND, which is 6 times more expensive than what the company just bought from resigned employees.

After the transaction, the total number of treasury shares was increased to 759,968 units. The company also announced a corresponding reduction in charter capital and the number of MWG’s voting shares to more than 1.461 billion units.

This is the third time MWG has revoked ESOP shares this year. Previously in May, the company bought back 328,789 shares or in February also bought back 154,211 treasury shares. Last year, this enterprise also conducted 3 rounds of revoking ESOP shares.

ESOP is one of the tools chosen by many businesses to encourage employees, because the issuance price is often significantly lower than the market price. However, these shares are restricted from transfer within a certain period of time. If an employee quits their job before the deadline, they will have to return the ESOP shares to the company at a pre-determined price, which is usually very cheap compared to the market.

The above move comes after a comprehensive restructuring of the system, which according to Chairman of the Board of Directors Nguyen Duc Tai is “reducing quantity, increasing quality”. In the past 11 months, they have streamlined the Mobile World chain (reduced 56 stores), Dien May Xanh (reduced 160 stores), An Khang (reduced 201 pharmacies) and Ava Kids (reduced 2 points of sale), especially Bach Hoa Xanh also reduced dozens of stores and then reopened them.

Correspondingly, the number of employees quitting from the beginning of the year to September was 5,156 people, the peak was in the first quarter. This is one of the heaviest layoffs in Mobile World’s history. The number of people losing their jobs this period is equivalent to 60% of the whole year 2023. Last year, they cut 8,594 jobs.

Mr. Nguyen Duc Tai once said that labor decreased due to natural reasons, some employees felt their income was no longer attractive or for other reasons they asked to withdraw. This takes place on a group-wide scale from low to mid-high levels to cut down on everything that is inefficient. “The rate of non-voluntary layoffs is very low,” he affirmed.

However, the management also announced the basic completion of the restructuring process. Therefore, in the fourth quarter, there will be fewer closures and they are also confident that the current staff has good quality and high working efficiency. MWG also deducted employee bonus expenses of nearly 1,689.4 billion VND at the end of September. This is for Tet bonuses for employees at the end of the year, on average each person will be more than 28 million VND – possibly equivalent to 3 months. wage.