Ofo to Cull Yet More Staff This Month, Insider Says–Yicai Global
What happened: According to an unnamed employee, troubled bike rental giant Ofo has been letting go of workers across the board, with plans to downsize further this month. Reportedly, only around 750 now work in the company’s Beijing headquarters due to Ofo’s current cash crunch. A company representative denied the most recent layoffs, but co-founder You Xin stated earlier in May that Ofo would downsize to 8,000 from 12,000 as it exits foreign markets. Yicai’s anonymous source also claimed that the bike-rental company has been using tactics such as purposefully neglecting employee growth in order to avoid handing out severance pay.
Why it’s important: Speculation of big layoffs at Ofo have been making the rounds since earlier this year. The company is certainly facing the heat from its main bike supplier, which has filed a suit against it for RMB68 million of unpaid debts. Ofo has attempted to supplement its income by selling advertising on its app and bikes, with mixed results; whether or not the latest reports are completely accurate, the company certainly faces rough times ahead.