Didi slashes employee benefits after announcing layoffs

2 min read

Didi

Ride-hailing platform Didi is cutting employee perks as it seeks to limit internal spending, a move that comes shortly after the company’s CEO announced plans to lay off around 2,000 employees.

Didi is slashing meal subsidies at its cafeterias, while increasing the prices of some goods. In addition, gym benefits and late-night snacks have been canceled, and funding for staff clubs is being cut. Workspaces at the company are also being made smaller. The policy came into effect on Monday.

News of the cuts began circulating on Chinese media over the weekend, detailing the extent of the reductions in a screenshot of a document that was sent to employees. In the internal memo, the company said the new policy is being implemented to “better save on internal expenses.”

A Didi spokesperson confirmed that the company had recently “made adjustments” to its employee perks, adding that it has “no plans to make any major cuts.”

The cutbacks come shortly after Didi CEO Cheng Wei told employees in an internal meeting that the company this year intends to lay off 15% of its workforce, amounting to around 2,000 people. Cheng said that the layoffs were a result of a reorganization plan announced in December and a performance review. He also said that Didi intends to an additional 2,500 employees in 2019 to focus on safety, compliance, offline driver management, and internationalization.

The news followed rumors that Didi lost nearly RMB 11 billion in 2018. In September, Cheng said that the company had “never achieved profitability.” Three months later, the company slashed its employees’ year-end bonuses in half, citing the firm’s poor performance in 2018.

According to Chinese media, Didi is offering generous severance packages, amounting to an employee’s annual income divided by 12 plus two months’ salary. Anonymous Didi employees posted on Chinese professional networking platform Maimai that “everyone wants to be fired after they became aware of the scheme.” The posts were widely shared on microblogging platform Weibo.

Didi has faced increased scrutiny following incidents in which two female passengers were murdered by their drivers while using the company’s carpooling platform Hitch. One of the two drivers was sentenced to death in early February, while the body of the other alleged murderer was found in a river following the incident.

An investigation by Chinese authorities at the company’s headquarters found that Didi’s Hitch service had “serious safety hazards.” The service has been suspended indefinitely.