DiDi Cuts 2,000 Employees in the Next Layoff
Established since 2012, DiDi has never been making profits. The latest rumor struck the public confidence in its profitability and DiDi's layoff marked the winter is ongoing for the never-profited unicorn.
Feb 15th, 2019 /EqualOcean/ - DiDi held the monthly meeting this morning and announced the new human resource plan. The plan aimed at upgrading DiDi current company structure and would cut around 2,000 bellow-performance employees in the coming layoff, which is 15% of the total.
DiDi made organizational structure change at the end of 2018. Several car-hailing service departments were re-organized into one integrated car-hailing business group; Xiaoju Auto Solutions (小桔车服务) and Asset Management Center were merged to one automobile solution platform. Whether the change made was out of its own strategic need or to comply with government policies, the restructure should bring DiDi to a more promising future, especially when it is entering the seventh year of operation and become the giant in ride hailing industry. The 15% layoff would be launched shortly and at the meantime, DiDi would employ 2,500 more for the development of security technology, product management, global business, and other core business departments, said the CEO. With the new blood, the total employee number would be maintained at 13,000 at the end of 2019, which would be the same as at the end of 2018
Founded in 2012, DiDi’s profitability has been questioned widely since it never brought profits to its investors. Though some of the departments realized profits, DiDi is in a loss for a general speaking. It has been rumored recently that DiDi’s loss in 2018 exceeded CNY 10.9 billion (USD 1.6 billion) with the encouragement policy and subsidies in a total of CNY 11.3 billion (USD 1.7 billion). Though the information’s authenticity is yet to be confirmed, the undeniable truth is that DiDi’s 2018 is a rough time.
In September 2018, the CEO CHENG Wei (程维) released that DiDi generated CNY 4 billion (USD 588.2 million) loss in 2018H1. The loss incurred in 2017 was approximately USD 300 million. DiDi launched the on-demand delivery service in March 2018, while the largest player in the market is Meituan Waimai (美团外卖). DiDi’s invasion in on-demand delivery happened months after Meituan initiating the ride-hailing service at the end of 2017. The competition between Meituan and DiDi brought benefits to their users since both cost more in compensation and subsidies. But in return, the competition harmed both parties’ annual performance in the expansion of unfamiliar business lines. In the second half of 2018, the safety scandals led to the shutdown of DiDi’s Shunfengche (顺风车) business and triggered DiDi to restructure itself and focus on the quality of growth. According to its CEO, the change in structure and the human resource adjustment is preparing DiDi to get through the winter.