(Yicai) Sept. 2 -- China International Capital Corporation has notified staff at the major Chinese investment bank about upcoming pay cuts, as a consequence of the downturn in the country’s capital market, according to a source familiar with the matter. The firm’s shares fell.

Following performance evaluations a few months ago, CICC has asked staff to accept demotions and corresponding salary reductions, the person told Yicai, adding that those who accept the new terms can sign new contracts, while those who decline can resign voluntarily.

CICC [SHA: 601995] dropped 4.3 percent to close at CNY27.36 (USD3.85) a share in Shanghai today.

Yicai reported in May that Beijing-based CICC had decided to lay off a third of its investment banking staff and slash salaries by as much as a quarter.

CICC’s headcount fell to 15,081 on June 30 from 15,327 on Dec. 31, according to its semiannual earnings report released on Aug. 30. Of the 246 employees who left, 221 were based in the Chinese mainland and 25 offshore.

In the six months ended June 30, CICC’s net profit tumbled 37 percent from a year ago to CNY2.2 billion (USD313.8 million), while revenue sank 28 percent to CNY8.9 billion. Investment banking income plunged 70 percent to CNY580 million (USD81.6 million) because of changes in the market value of Star Market investments and lower underwriting fees.

CICC is not the only Chinese securities or investment company that is downsizing because of the soft capital market. Fourteen brokerages with assets of more than CNY200 billion (USD28.1 billion) laid off a total of 5,735 employees in the first half, according to data from Wind International.

Founder Securities let go 1,381 staff, the most among the firms, while other major players, such as Citic Securities and China Securities, let go over 500 employees each, the data showed.

Chinese state-owned investment giant Central Huijin Investment is CICC’s largest shareholder, with a 40 percent stake.

Editor: Futura Costaglione