In ofo’s latest retreat from the international market, the company is scaling back its operations in the United States after laying off 70% of its staff in the country.

Additionally, three executives from ofo’s US business have resigned in the past two weeks, a source told TechNode. The layoffs were announced internally on July 18, with the company planning to halt operations in numerous US cities. However, exact areas were not specified.

The company has also shuttered its businesses in Germany, India, Australia, the Middle East, and parts of the United Kingdom.

ofo’s operations in the United States (Photo Credit: ofo)

The company was operating in 30 cities across the US, with plans to serve more than 100 by the end of 2018. In April, it announced that it had facilitated more than one million rides in the US during its first three months of operations.

The future of ofo’s e-scooter plans is also unknown, with sources saying it is uncertain whether they will be launched after everyone is gone.

However, a company spokesperson said the company is focussing on what it deems to be priority markets in order to move towards profitability. “We are communicating with our local markets about plans going forward,” ofo said, without specifying on which markets the company plans to focus.

Nonetheless, talk of ofo’s financial woes has been circulating for the past few months. In June, a source told TechNode that the company had laid off nearly half of its 60 employees at its Singapore office. Additionally, ofo co-founder Yu Xin denied claims that the company was retrenching 50% of its staff in China due to cash trouble. The company countered news of the layoffs by sending lawyers letters to media companies involved in writing what the company referred to as slanderous and defamatory articles.

After Australia, ofo exits Germany amid push into priority markets

Interestingly, Xu also denied that its international operations were being shut down following the departure of COO Zhang Yanqi. However, in early July ofo announced that co-founder and CEO Dai Wei would begin overseeing its global business.

In addition, ofo’s Chinese business began selling advertising on its bicycles and in its app in May. This, however, was short-lived as some cities moved to ban placed ads on bikes. This, along with a limitation on the number of bicycles allowed on city streets and an imposed lifespan on bicycles, has made the bike-rental industry a difficult one to make profitable.

Christopher Udemans is TechNode's former Shanghai-based data and graphics reporter. He covered Chinese artificial intelligence, mobility, cleantech, and cybersecurity.

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