JD Logistics scrapped couriers' base pay after ¥2.8B losses; couriers gamed piece rates

In an internal letter on April 15, 2019, JD.com founder Richard Liu said JD Logistics would scrap couriers' basic salary after a ¥2.8 billion ($420 million) net loss in 2018. JD had long marketed its salaried, in-house courier fleet as the quality moat behind its e-commerce service. The unit — spun off in 2017 and valued around $13.5 billion — had been losing money for over a decade by Liu's own account: 'If losses continue, JD Logistics only has two years of runway left. The main reason is we had too few orders externally and too high a cost internally.'

Under the new scheme, courier income is based on the number of packages handled, with JD continuing to pay social insurance. Liu said the old basic pay was only about 10% of delivery staff's total income and framed the change as a way to boost, not cut, pay. But a Shenzhen courier told TechCrunch monthly pay used to average ¥7,000-8,000 ($1,043) and had fallen to ¥5,000-6,000. Couriers are assigned to fixed regions, so with parcel volumes roughly constant they had little room to earn more — and some began mailing parcels to themselves and rejecting them to jack up piece-rate income.

The income restructuring landed amid a broader layoff drive at the parent company targeting low performers — what Liu labelled 'slackers' — and JD's namechecked association with '996' work schedules, which the company denied practicing. Analysts noted JD could not raise prices on customers in China's subsidy-driven express market, 'so it's passing the cost to the couriers,' as Web2Ship founder Alex Cheong put it.

¥2.8B ($420M) 2018 net loss at the logistics unit; Shenzhen couriers' monthly pay fell from ¥7,000-8,000 to ¥5,000-6,000

JD's in-house courier model was a decade-long money loser by the founder's own account: too few external orders and too high internal cost.

The fix addressed neither problem — it shifted cost onto couriers whose fixed regional assignments capped their ability to earn more piece-rate income.

Piece-rate pay under fixed territories invited gaming: couriers self-mailed parcels and rejected them at delivery to inflate income.

JD had marketed salaried, in-house couriers as its quality edge, so cutting their base pay risked the morale and service quality the moat depended on.

When a company sells 'quality service' built on fixed-cost labor, the first place it looks when growth slows is the workers' guaranteed pay — and piece rates invite gaming.

JD said it had no comment on the issues in Liu's letter. The company kept looking for revenue by opening its logistics service to third-party clients and expanding overseas, while fourth-quarter 2018 cost of revenues grew 20.7% to $16.8 billion, driven mainly by logistics and online direct sales. Liu said the goal was eventually to boost courier pay; in the near term, Shenzhen couriers were earning less and some resorted to self-mailed parcels to make up the gap.