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Baidu Inc. workers called off their strike at China's top Internet search site although they hadn't reached an agreement with the company over new compensation policies.

Representatives of several hundred employees from two southern cities finished meetings on Monday with executives from Baidu's Beijing headquarters, including the head of human resources and an assistant to Chief Executive Robin Li. The workers said they will give the company three days to come up with a fair response and decide what to do after that.

The employees stopped working May 4 over salary cuts and new commission policies they said were designed to force people out of their jobs.

Baidu, with about triple the share of Chinese Internet search revenue of Google Inc., set new sales targets at the start of this month and said it would withhold commissions from employees who don't meet them, according to the workers. Also, base salaries were reduced by about 30%, said the workers, who are demanding that the policies be canceled and that the company's regional manager be fired.

Baidu said Monday that the new, nationwide policies are designed to 'incentivize our sales force and promote healthy growth in the long term.'

'While there are some issues with certain employees in parts of our operation, we are currently addressing the issues and expect a prompt resolution,' the company said.

Even if the strike is over, some analysts said its interruptions could affect the company's performance when it also faces a weak advertising market and still is recovering from bad publicity last year for carrying ads from unlicensed medical companies.

Fiona Zhou, analyst for research firm JL McGregor & Co., says Baidu's commission policies make sense from an accounting perspective and could help improve operating profit. 'But in the short term,' she said, 'the absence of these sales employees will definitely affect their second-quarter revenue.' She said it is hard to quantify the impact but that Baidu 'is completely dependent on their sales people.'

Baidu workers visited government labor bureaus Thursday and Friday complaining that the company violated their rights. An official at the Labor and Social Security Bureau in the Tianhe district of Guangzhou, one of southern China's biggest cities, said Baidu said the new policies were 'normal internal adjustments' and that Baidu has no plans to make layoffs.

A striking worker said Monday that Baidu executives 'have promised to solve the issue in a satisfactory way. . . . We will wait and see.' But he said the workers and the company 'haven't come up with any specific plan or strategy to solve the issue.'

Baidu, which reported revenue of $469 million last year, had about 6,200 employees as of March.

Labor strikes aren't illegal in China but they are discouraged by the government, and the country's government-backed labor union doesn't support them. Still, with job losses and labor disputes increasing with the economic downturn, labor activists say the number of strikes is on the rise in the country.

Government labor officials in Guangzhou said employees have a right to submit complaints to their labor bureaus if they feel their rights have been violated. Usually, a bureau will contact the employer and mediate between the parties. If that fails, the bureau will accept an application for labor arbitration in court. In cases that involve large numbers of people, officials may investigate the employer and issue a punishment if the employer has violated any laws.

Loretta Chao


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