Didi to lay off 2,000 employees amid rumors of record losses

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Chinese ride-hailing giant Didi will this year lay off 15% of its employees, amounting to around 2,000 people, a move that follows rumors the company made record-breaking losses in 2018.

Sources close to the company told TechNode that Didi CEO Cheng Wei made the announcement at an internal meeting on Friday, saying that the ride-hailing giant would cut headcount and that some non-core businesses would be re-evaluated and cut back if necessary.

Didi declined to comment when contacted by TechNode.

The move comes shortly after Didi was rumored to have made a loss of nearly RMB 11 billion (around $1.6 billion) in 2018. In December, Didi slashed its employees’ year-end bonuses in half, while executives received nothing, due to the company’s poor performance last year. Cheng said in an internal memo in September that Didi had “never achieved profitability” since its establishment.

Also in December, Didi announced a reorganization plan to improve passenger safety, while appointing two new executives to oversee emergency management. It also merged its car-hailing services into a single business to promote compliance.

At the meeting on Friday, Cheng said the layoffs are a result of the reorganization and a performance review

Sources said that the company plans to hire an additional 2,500 employees to focus on safety, compliance, offline driver management, and internationalization, among others. Didi is expected to end 2019 with around 13,000 employees in China, roughly the same as at the end of 2018.

The company has seen increased government and public scrutiny in the aftermath of two high profile safety incidents on its platform last year, in which two female passengers were murdered by their drivers while using Didi’s services. One of the drivers was sentenced to death earlier this month, while the body of the other alleged murderer was found in a river shortly after the incident.

A national-level investigation at the company’s headquarters following the incidents found that there were “serious safety hazards” in its carpooling service Hitch—the platform the drivers used to target their victims. The service has since been suspended indefinitely.

At the meeting, Cheng said that the entire ride-hailing industry had a long way to go before it achieved its security goals.