BYD Co, a Shenzhen-based carmaker, has started a new round of salary cuts, according to insiders from the company.

BYD will lower its employees' merit pay from June to September, the sources revealed. It is estimated that overall salaries, including basic and merit pay, for employees who will be affected by the move will go down 14 percent, allowing BYD to save about 240 million yuan ($37 million) in labor costs.

The company decided to lower salaries for workers after its profits dropped due to worsening economic conditions, according to an internal document from BYD.