Renrenche, the Chinese online second-hand car dealer backed by Tencent and ride-hailing giant Didi Chuxing, is undergoing major job cuts as the country’s once booming tech sector continues to be hit by a macro economic slowdown. The lay-offs – the Beijing-based start-up’s second round of cuts this year – could see a reduction of up to 60 per cent of total staff, reported online news portal Sina.com, citing a dismissed employee who was told about the overall plan at a meeting with the human resources department. A company spokesman denied that the job cuts would impact as many as 60 per cent of staff but declined to comment further. “The team optimisation is in line with our strategy upgrade and is normal,” the spokesman said on Monday. The latest cuts come amid a major business shift by Renrenche after it unveiled a partnership scheme earlier this year. The move aimed to turn in-house salespeople and local staff into self-employed “business partners” with their own profit and loss account. Goldman leads US$300m investment in Chinese used car platform “Part of our team and personnel structure is in dire need of upgrade and adjustment,” company founder and chief executive Li Jian said in an internal letter issued earlier this month outlining the partnership scheme and plans for further “optimisation”. “There’s a spreading tendency for slow decision-making, inefficiency, sloppiness and lack of discipline [within the company],” he said. “Therefore, we will revamp and reorganise the corporate structure to make respective adjustments.” The revamp will better position Renrenche for “challenges and opportunities” in the second half of the year, Li added, without elaborating on how many jobs would be affected. Second-hand car transaction volumes grew 11.5 per cent year on year in 2018 to 13.82 million units, according to statistics from the China Automobile Circulation Association. That compared with a growth rate of 19.3 per cent in 2017. Reports of tighter hiring practices in China’s tech sector began circulating at the end of 2018 after start-up valuations began to cool and slower economic growth impacted market conditions for private enterprises. Extra tariffs on Chinese goods ‘will cost Americans US$18 billion a year’ That slowdown was exacerbated by the trade war between the world’s two largest economies that has since begun to impact bigger firms too. In May, US tech major Oracle initiated lay-offs that reportedly could involve hundreds of employees at its China research and development centre in Beijing. Loss-making Didi – Renrenche’s major investor – kicked off a large-scale organisational restructuring of its own and has “optimised” 2,000 jobs since the start of the year as it pares back operational costs, a company executive said in an internal letter in April. E-commerce giant JD.com is also looking to reduce headcount across the company, cutting some teams by as much as half, while withdrawing some employment offers to college graduates, according to a Bloomberg report in April. Founded in 2014, Renrenche’s other investors include Shunwei Capital, backed by smartphone vendor Xiaomi CEO Lei Jun, as well as Beijing Prometheus Capital, led by Wang Sicong, son of property billionaire Wang Jianlin. China’s used car sales boom over the past few years has created intense rivalry among competitors. At one point, leading players splurged on promotional campaigns that enlisted Hollywood stars like Leonardo DiCaprio, and domestic icons Huang Bo and Sun Honglei, to lure new users to sign up.