Didi starts major job cuts as it overhauls business

RE-EVALUATING THE SITUATION::The Chinese firm was said to have lost 4 billion yuan in the first six months of last year after regulators cracked down on ride-hailing


Sat, Feb 16, 2019 - Page 10

Didi Chuxing (滴滴出行) plans to eliminate about 2,000 jobs, beginning one of the biggest rounds of cutbacks in China’s technology sector, people familiar with the matter said.

Cofounder Cheng Wei (程維) announced the cuts, representing 15 percent of its workforce, during an internal meeting yesterday, where he said some businesses would be re-evaluated and cut back if needed, the people said.

However, the company plans to hire 2,500 workers to staff other areas this year, the people said, asking not to be identified as they were talking about a private matter.

After driving Uber Technologies Inc out of China in 2016, Didi looked ready to dominate China’s ride-hailing market even as it delved into new services from bike-sharing to payments and overseas markets such as Latin America.

Since then it has faced a regulatory and consumer backlash at home after two women passengers were murdered, prompting a shift in focus to safety over growth.

The world’s third-most valuable start-up has also had to contend with fresh competition on its turf from the likes of Meituan Dianping (美團點評).

Despite the cutbacks, Didi intends to add 2,500 people to focus on areas from its international expansion to safety and product engineering, the people said, citing Cheng’s comments.

That means that by the end of this year, it should have about the same Chinese headcount as last year — 13,000 people.

Didi, backed by Apple Inc and Softbank Group Corp, has weathered a storm of criticism after the two passengers died within the space of months. Users began publicly deleting the app, forcing the company to make an apology and promise to prioritize safety, while removing some executives.

Regulators cracked down on the types of drivers and vehicles allowed, shrinking the pool of available rides and stoking discontent among passengers over lengthy wait times.

The Chinese ride-hailing giant is said to have lost 4 billion yuan (US$590 million) in the first six months of last year alone.

Before these cutbacks, Didi had already mothballed certain expansion plans in favor of continuously rolling out a series of compliance and safety measures.

Cheng is said to have told employees last year that the company needed to get away from a single-minded focus on growth — a mentality that earned it a US$56 billion valuation, according to CB Insights.

Even if the company replaces all the people it is letting go this year, the sheer scale of the round of layoffs would be near-unprecedented among a nation of start-ups that until last year enjoyed a record boom.