Chinese ride-hailing platform Didi wants to lay off 20% of its staff, Chinese media LatePost reported on Monday night. Didi is showing stress signs after Beijing launched a cybersecurity review on the company last July.

Why it matters: Didi is trimming its workforce to reduce operating costs and better cope with intense competition in the ride-hailing market. Other ride-hailers started going after Didi’s market share in China after regulators ordered the removal of Didi’s apps from app stores to review the company for cybersecurity reasons. The review, launched in July, is still ongoing.

Read more: Didi app ban ignites race for ride-hailing market share

Details: Didi will lay off about 20% of its staff across major businesses, including ride-hailing service, package delivery, and bike rental, Chinese media LatePost reported Monday, citing people familiar with the matter. Didi has already begun laying off employees in its corporate research lab in mid-January. 

  • Sources told LatePost that the lay-offs will be completed by the end of this month. The company reported an average of 20 million trips per day in January, a 20% decrease from 25 million rides during the first quarter of last year. In addition, Didi’s share of the ride-hailing market fell from nearly 90% to 70%.
  • R-Lab, Didi’s corporate research lab set up in 2017 and incubated its food delivery project, will close its operation in China, while overseas staff from the lab are consolidated into its international business group. 
  • Didi’s self-driving subsidiary will be excluded from the job cuts, the report said.
  • The ride-hailing giant has been unable to add new users. At the same time, it has also experienced a shrinking existing user base since the Chinese government launched a cybersecurity probe into the company in July. Meanwhile, its new businesses have made slow progress, the report said.
  • Didi did not respond to a request for comment by TechNode on Tuesday morning.

Context: Didi’s domestic ride-hailing business took a hit due to Beijing’s investigation. The company posted a net loss of RMB 30.4 billion ($4.7 billion) in the third quarter of 2021, compared with a net income of RMB 665 million during the same quarter a year earlier. Its revenue decreased by 13% quarter-on-quarter to RMB 39 billion over the same period.

  • Didi’s biggest rival Amap has taken this chance to build up market share, achieving 5 million daily rides on average since last September. The Alibaba-owned map platform is planning to launch a standalone ride-hailing app and establish its own car fleet, moving away from being an aggregation-only platform for third-party drivers, the LatePost report said.

Jill Shen

Jill Shen is Shanghai-based technology reporter. She covers Chinese mobility, autonomous vehicles, and electric cars. Connect with her via e-mail: jill.shen@technode.com or Twitter: @yushan_shen