Chinese social fitness app Keep is laying off a sizable portion of its employees after reportedly quadrupling its workforce just last year.
Why it matters: Keep is joining a list of Chinese tech firms including Huawei, Didi, and knowledge-sharing site Zhihu in tightening headcount amid the country’s economic slowdown, compounded by a decline in outside investment referred to as “capital winter.”
- Fueled by “bubble-like” valuations from private investors, some Chinese tech firms expanded quickly to multiple businesses at a high cost.
Details: Discussions about Keep’s layoffs have been circulating on the Chinese professional networking platform Maimai since Thursday.
- “I was notified that I was laid off at 2 a.m. on October 24, had a talk at 3 a.m. and asked to leave at 4 a.m.,” said a Maimai user who is a verified Keep employee. “The number of Keep colleagues in our working group dropped from 856 to 797, and this is going to continue tomorrow,” he said in the post.
- Another Maimai user said the layoffs will affect 300 employees, which the company refuted, saying that it is “optimizing around 10% to 15%” of its more than 800 employees, meaning up to 120 staff members.
- The job cuts take place after the company’s rapid expansion in 2018, when the headcount jumped from around 200 at the beginning of the year to 800 at year-end, according to another Maimai user.
- The job cuts were mainly for technical positions, according to Chinese media reports.
- The company suspended a recruitment livestreaming on the online hiring platform Lagou slated for Friday morning.
- Cutting jobs on October 24 or “1024,” known as Programmer’s Day in China, also drew ire from netizens.
Capital winter is forcing China’s startup scene to get mature
Context: Keep, founded in 2014, started as a mobile fitness community that provided online fitness training programs. It gradually expanded its offline presence into fitness equipment, wearable hardware, and workout apparel.
- The company closed a $126 million Series D in July 2018 led by Goldman Sachs with the participation of Tencent, GGV Capital, and Morningside Venture Capital, which increased its fundraise total to nearly $175 million.