Chinese ride-sharing firm Didi Global is reportedly laying off as much as 20% of its employees, as regulatory pressure continues to take a heavy toll on the company’s once burgeoning business.
The layoff is said to have already started in mid-January and will be completed before the end of this month, Chinese media LatePost reported on Monday. It will affect core business units such as logistics and ride-hailing in China, but won’t be extended to Didi’s overseas operations, according to LatePost. The Beijing-based company employed almost 15,000 people in its domestic markets as of Dec.31, 2020, its prospectus showed, and a 20% layoff would cause 3,000 people to lose their jobs.
A Didi spokesperson declined to comment. Since launching a cybersecurity investigation into the company shortly after its $4.4 billion initial public offering in New York last June, Chinese regulators have maintained a heavy-handed approach towards the country’s ride-hailing industry. On Monday, regulators vowed again to strengthen oversight. Platform companies could have their apps blocked or be ordered to suspend operations if they violate rules involving users’ personal information, the labor rights of drivers, as well as internet and data security, the state-run Global Times reported.
Didi, on its part, already have all 25 of its apps removed from China’s app stores for problems related to collecting and use of customer data, and these apps remain inaccessible to new users as of today. Its shares have tumbled 70% over the past year, wiping out tens of billions of dollars in market value. In the September quarter of 2021, the company reported a whopping $4.7 billion in losses, while revenues fell 13% to $6.6 billion from the previous quarter and 1.6% from the same period a year ago.
Led by 39-year-old billionaire Will Wei Cheng, the company has also announced intentions to delist from New York, and convert its American Depositary Shares into freely tradable shares in Hong Kong. It could list as soon as the second quarter of this year, according to a South China Morning Post report citing anonymous sources. The company is trying to meet all listing requirements in the Asian financial hub, including the licensing of its drivers, the newspaper reported.
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