JD becomes the latest Chinese tech majors to begin wide-scale layoffs. Jingxi, the e-commerce giant’s bargain commerce and community group buy business unit, is seeing a cut of 10% to 15%, Chinese media outlet 36Kr reported Tuesday, citing unnamed sources familiar with the matter.
Why it matters: JD’s layoff reflects the ongoing economic downturn in China and a waning interest in the country’s community group buy sector.
- Jingxi was JD’s effort to get into the bargain commerce market that has traditionally been dominated by Pinduoduo. After the success of Pinduoduo, major e-commerce players Alibaba, Meituan and JD have launched their own competing products.
- Launched on Jan. 1, 2021, JD’s Jingxi Pinpin failed to compete with other rivals. In 4, the platform had just 8 million daily orders, only one-fifth of Pinduoduo’s Duoduo Maicai.
Details: JD’s layoff will affect at least 400 to 600 staff in the Jingxin unit, according to sources quoted by 36Kr. Jingxi employs about 4,000 staff.
- Jingxi consists four main teams: Jingxi focuses on bargain deals, Jingxi Pinpin on community group buy, Jingxida on logistics, and Xintonglu on enterprise businesses. The reported layoff is mainly focused on Jingxi Pinpin. JD’s other core business units, like customer electronics and retail e-commerce, are largely safe from the cuts.
- JD’s 2021 financial reports noted that losses from new businesses, including Jingxi, expanded by 160% quarterly to RMB 3.2 million ($505,921) in Q4 of 2021.
Context: JD joins a growing list of Chinese tech giants cutting staff to stay competitive in an economic slowdown. Since late last year, Alibaba, Baidu, ByteDance, Kuaishou, and Tencent have all begun to lay off people.
- Alibaba has started to make major cuts in its local food and grocery delivery business this year.
- Last week, Tencent was reported to be cutting 20% of its workforce.
- Baidu has also begun a series of layoffs, with the first round beginning in last December, affecting employees in the company’s gaming, streaming, education, and mobile environment sectors. In January, Baidu further downsized 10-15%, Chinese media reported.