Beike Zhaofang, China’s biggest online property agency, axes staff as housing sector heads into a bleak winter
- US-listed Beike has been laying off staff as a downturn in China’s property industry dents its income from sales commission fees
- China’s benchmark price index for new homes fell in September for the first time in more than six years while transactions across the country are plunging
“We all knew it was just a way to persuade us to leave the company,” said Xue, who was in charge of processing payments for second-hand home transactions. “By hanging on here, one only makes oneself unwelcome.”
Xue is not alone, and the Chengdu branch is just one Beike outlet letting staff go.
A post by an anonymous person verified as an employee of Beike on Mai Mai, a platform dubbed China’s LinkedIn, saying the company had scrapped its entire research unit in Shanghai went viral earlier this month.
The person said he had been laid off with compensation of three months’ salary and that the whole department would be gone by October 18.
“The company is readjusting the financial business in Shanghai due to drastic changes in the industry,” Beike said in a reply to the Post’s inquiries.
The employees affected would be properly dealt with in compliance with laws and regulations, and “be given priority in internal transfer opportunities,” it added.
China’s red hot property sector has been under intense scrutiny as the Communist Party tries to prevent skyrocketing prices leading to sociopolitical tension, particularly during important anniversaries such as the ruling party’s centenary celebrations this year.
About 17,000 new units were sold during the “golden week” holiday between October 2 and October 8, a third less than during the same national day holiday last year, according to sector analysts at the brokerage unit of Bank of China, which monitors sales in 52 major cities.
That leaves property brokers like Beike, which rely on income from commission fees for completing home sales, with a headache.
Beike, which means seashell in Chinese, was launched in 2018 by Zuo Hui, who had founded Beijing Lianjia Real Estate Brokerage, known as Beijing Homelink Real Estate, in 2001, and has quickly become the biggest online real estate transaction platform.
Its net revenue between April and June increased 17 per cent to 24.2 billion yuan as compared to the previous quarter.
The number of agents on its payroll dropped by about 20,000 to 528,424 in the three-month period.
Beike did not disclose the estimated number of staff being cut, or whether there would be more rounds of lay-offs.
What seems certain is that there will be more jobs losses in the property sector.
“It won’t be easy for everyone in the industry when the winter is coming,” said Yan Yuejin, director of the Shanghai-based E-house China Research and Development Institute.
Beike’s shares had plunged by about a third to US$21.89 as of October 20 since its US$2.12 billion initial public offering last August.
