Chinese media outlet LatePost reported on Monday that Didi Inc., the Chinese ride-hailing giant, is now implementing the company’s long-rumored layoffs. One Didi employee said that the plan will be implemented very quickly and that layoff notices will be completed by the end of February.
The proportion of layoffs will vary from department to department. The overall layoff ratio will remain at 20%, and the operations and business departments will be cut by 20%.
In mid-January, layoffs began with R-Lab, a department that was established in 2017 and dealt mainly with food delivery, though it also explored the deployment of minibuses. This time, R-Lab’s domestic business has been abolished and the international take-out technical team has been merged into the international department.
Didi has now launched a layoff plan that covers almost the entire company. Recently, executives in charge of the company’s ride-hailing, two-wheeled vehicles and freight transportation businesses have received layoff notices.
The international department has not been affected, and it is still hiring. People familiar with the matter believe that Didi’s domestic app cannot accept new users, leading to a declining market share, but it can continue to explore the international market.
The company’s department in charge of autonomous operations wasn’t involved in the layoffs either. After the business was spun off into an independent subsidiary in 2019, it is one of the most independent departments in Didi.
After two negative accidents of hitchhiking in 2018, Didi laid off 15 percent of its staff, or about 2,000 people, from its marginal business departments.
Since the company was reviewed by information security regulators in 2021, the market size of Didi has been steadily declining. According to Didi’s financial report, the core operating data of its ride-hailing business in China, such as revenue, order volume and income per order, decreased by 13%, 9% and 5% respectively, in the third quarter of 2021 compared with the previous quarter.
By January 2022, the number of average daily orders on the platform was about 20 million, which was a fifth lower than the 25 million orders disclosed in the company’s listing prospectus. Didi’s share in the online ride-hailing market has also dropped from nearly 90% to 70%.
“Some core departments responsible for the pricing, transactions, and subsidies of the ride-hailing business are laying off employees,”
a source said.
After Didi’s applications were removed from app stores, Didi’s two-wheeled vehicles, freight transportation and community group-buying unit named “ChengXin YouXuan” have all been affected to varying degrees.
A person familiar with the matter said that, in 2021, Didi’s two-wheeled business, including share bikes and motorbikes, still lost money, while the group-buying unit continued to shrink. From September 2021, the service area of ChengXin YouXuan has shrunk from 31 provinces to 9 provinces, and the number of residents it served has decreased from 16,000 to 5,000.
As a new business just started by Didi, freight transportation independently raised $1.5 billion in early 2021 (half of which came from Didi itself), and quickly entered into 20 cities across the country in April last year. However, after Didi’s application was removed from online stores, the unit has already fired some staff due to a declining consumer base.