Exclusive | Chinese ride-hailing giant Didi Chuxing said to start new round of lay-offs affecting hundreds of jobs ahead of Lunar New Year holiday

Didi is expected to slash jobs at nearly every department, including its ride hailing, overseas business and risk management operations
This followed lay-offs that the Beijing-based company conducted in February last year

Didi Chuxing

Coco Fengin Beijing

Published: 9:30pm, 12 Jan, 2023

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Chinese ride-hailing giant Didi Chuxing has initiated a new round of lay-offs affecting hundreds of jobs, according to two people familiar with the matter, as the country’s Big Tech companies continue their restructuring efforts ahead of the Lunar New Year holiday.

The job cuts will cover nearly every department in Beijing-based Didi, including its ride hailing, overseas business and risk management operations. Compensation for the dismissed employees will be calculated based on the number of years of service, according to the people, who said each terminated worker will also receive a month’s salary as part of their release.

The lay-offs followed Didi’s decision last month to trim this year’s budget for many of its departments, one of the people said. Didi’s action has raised some complaints because of the timing, according to one other source, who said employees typically receive their annual bonuses in February.

Didi declined to comment on Thursday.

A woman walks past the headquarters of ride-hailing giant Didi Chuxing in Beijing on July 16, 2021. Photo: AP

The ride-hailing service provider’s latest move shows that restructuring is still under way at China’s Big Tech firms amid weak consumer spending and a flagging domestic economy, following Beijing’s decision last month to lift its strict zero-Covid-19 policy after three years.

Chinese tech firms rarely admit to axing jobs because lay-offs involving more than 20 employees require intervention from labour authorities under local law. Still, many companies have been conducting so-called business optimisation in stages since 2021 to slash costs.

Several major technology companies in China have collectively cut thousands of jobs since last year, including Alibaba Group Holding, Tencent Holdings and TikTok owner ByteDance. Alibaba owns the South China Morning Post.

The lay-offs at Didi have come several months after the government slapped Didi Global with a fine of 8.026 billion yuan (US$1.2 billion) for data violations, which put an end to a year-long cybersecurity review into the company. Didi was investigated after it went public on the New York Stock Exchange (NYSE) under the name Didi Global on June 30, 2021.

China’s Big Tech not yet done with lay-offs as 2022 nears its end

Didi’s last round of lay-offs was conducted in February last year, as the company sought to delist from the NYSE to help resolve Beijing’s cybersecurity review.

Didi Global started trading on the over-the-counter market in June last year, following its delisting from the NYSE. Its shares closed up 4.2 per cent to US$4.7 at the close of trading on Wednesday.

While Didi ponders its next steps to push forward an initial public offering in Hong Kong, a number of Big Tech firms are trying to carve out a foothold in the ride-hailing services market. These include on-demand delivery service provider Meituan, telecommunications equipment maker Huawei Technologies Co, Tencent’s WeChat and ByteDance.

As Didi stumbles, tech giants race to grab China’s ride-hailing market

New competitors have emerged amid the sluggish state of Didi’s core business. The company’s ride-hailing orders fell 21 per cent between December and June last year, as China’s zero-Covid-19 curbs significantly weakened demand, according to data from the Ministry of Transport.

Chinese authorities have also significantly reduced fines slapped on those who provide unlicensed ride-hailing services, months after the State Council moved to relax penalties in the transport industry to introduce further local administrative discretion.

That and other revisions reflect the central government’s efforts to improve the legal framework covering the country’s ride-hailing services market, which is the world’s largest.

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