Chinese online retailer JD is expanding its layoffs, cutting people in nearly every business unit, including its core retail businesses, local media outlet Jiemian reported on March 27.
Why it matters: JD’s layoffs will be worse than the market initially expected. China’s months-long tech layoff, which started late last year, shows no sign of ending. Big-name behemoths like Alibaba and Tencent began broader layoffs earlier this month.
Details: In addition to laying off people in its community group-buy unit Jingxi, JD is expanding the recently-launched layoffs to its core businesses, including JD Retail, JD Technology, JD Logistics, and JD’s international business department, Jiemian reported, citing several employees at the company.
- JD plans to cut between 10% to 30% of the jobs, with cut rates varying by the departments, according to a widely-circulated internal spreadsheet revealed by local media.
- For example, JD Retail will face a 10% to 30% layoff in technology, business development, and platform operation positions, while the firm’s international business unit will be cut by 10% to 15%.
- The company’s community group buy service Jingxi remains the worst-hit unit. Some of the unit’s regional teams will let go of the entire team, such as the teams in Guangdong, Jiangxi, and Sichuan provinces.
- The Jiemian report said that there are few opportunities for internal transfers since the layoff affects the whole company.
- The company declined to comment on the layoff news when contacted this Monday.
Context: On March 11, JD posted a RMB 5.2 billion ($0.8 billion) net loss for the fourth quarter of last year and reported its weakest revenue growth in six quarters.
- Slowed economic growth, fierce competition, and trade tensions are weighing down the revenue growth of China’s e-commerce giants. Alibaba and Pinduoduo recorded their slowest quarterly revenue growth in the fourth quarter of 2021 since their respective IPOs in 2014 and 2018.
- In December, Tencent weakened its ties to JD by distributing around $16.4 billion worth of shares in the online retailer to its shareholders as interim dividends. Both companies said their partnerships won’t be affected, although Tencent’s shareholding in JD will be reduced from 17% to 2.3%.