Workers start manufacturing at a shoe factory in Central China's Hunan Province on Monday. Workers are required to wear masks and measure their body temperatures twice a day. Photo: cnsphoto

As business resumptions have been delayed amid the virus outbreak, small and medium-sized enterprises (SMEs) in China are mulling at least 30 percent job cut, a small enterprise association director said Thursday.

"Contrary to a temporary labor shortage, mass layoffs may take place in a month or two. Some companies that can't restart operations may have already laid off staff," Zhou Dewen, deputy director of the China Association of Small and Medium Enterprises, told the Global Times.

Among over 10 calls he received from managers of SMEs, Zhou said, a majority have admitted to cutting payrolls and some are even prepared to declare bankruptcy, if employees seek arbitrations. 

"With smaller scale, more tight cash flow, many SMEs are more vulnerable to risks compared with large enterprises," Zhou said, noting that some SMEs said they welcome these employees to rejoin after the company endures this difficult period.

Hong Kong-registered Capital Estate Ltd said Wednesday its Fortuna Hotel Foshan in South China's Guangdong Province has halted operations at the end of January and will continue to suspend work.

Citing uncertainty over the suspension period, the company said it will gradually lay off 250 employees, accounting for about 90 percent of Fortuna Hotel Foshan, in order to reduce cash outflow that yields no returns. Those layoffs will be compensated according to local laws, it said.

Chinese authorities have rolled out measures to stabilize employment. The State Council, China's cabinet, decided on Tuesday that China would scrap or reduce corporate contributions to employee endowment, medical and unemployment insurance for a certain period.