Bilibili has started a round of layoffs in mid-May, according to a report by Chinese media outlet Caixin, citing multiple sources at the company. The layoffs reportedly have affected 20% of staff working with the video platform.
Why it matters: Bilibili has yet to turn a profit since it went public on Nasdaq in 2018. This layoff highlights the company’s urgency to reach its goal of becoming profitable in 2024, as mentioned by CFO Fan Xin in a March earnings call.
- Bilibili’s financial results from 2021 showed that its net loss expanded119% to RMB 6.8 billion ($1.1 billion) throughout the year, a much higher rate than the 62% growth in revenue during the same period.
Details: The layoffs will mainly affect three departments: streaming, gaming, and commercialization, Caixin reported. A spokesperson from Bilibili told TechNode that the “workforce adjustments were due to business adjustments” and that they had not implemented large-scale staff cuts.
- These three departments will primarily take the brunt of the cut, and Bilbili’s main business units are less affected by the cuts, two laid-off staff from Bilibili told Caixin.
- Some employees that passed the company’s annual performance review were also cut, according to Caixin’s report.
- Some of the staff affected by the layoffs had recently joined Bilibili from other tech giants, with such employees generally negotiating for higher pay and tend to be targeted in layoffs, according to the report.
- The firm offered laid-off employees the “N+1” compensation commonly used in China. “N” is the working years. The company will compensate monthly salary based on the working years plus one more month.
Context: Major Chinese tech firms like Tencent and JD had expanded layoffs as they are heavily affected by the new Covid-19 outbreaks and subsequent pandemic control measures. Chinese tech firms have expanded the scale of layoffs, even in crucial business arms like Tencent and JD.
- While layoffs at Tencent began in late 2021, the tech firm expanded layoffs in May, cutting about 20% of staff, including those in the gaming departments, Tencent’s core business units.
- In March, major Chinese e-commerce firm JD also expanded its layoffs, downsizing nearly every business unit, including core retail businesses at the company.