Xoaohongshu, a lifestyle e-commerce platform, claims to have around 200 million users, mostly in China.
According to Insider, amid the pressures of a weaker economy and Beijing's regulatory crackdown on tech, the app has laid off approximately 10% of its workforce. The workers were dismissed after a performance review in March, described as "normal HR optimizations." Some Chinese social media users claimed they work at Xiaohongshu and were asked to leave the same day they were dismissed.
Xiaohongshu's axed employees join the masses of tech workers reportedly being let go by China's major tech companies. Last month, Insider reported that at least 400 were laid off at Chinese e-commerce giant JD.com, while Reuters reported that its competitors — Alibaba, and text-messaging and gaming giant Tencent — are cutting tens of thousands of jobs this year.
The rumblings on social media prompted China's cyberspace regulator to say earlier this month that employment in the sector has remained largely stable. It said that between last July and mid-March, some 216,800 workers left and 295,900 new hires joined the 12 internet companies it spoke to. Although layoffs at China's tech firms are not uncommon, this round of dismissals is large-scale and coincides with Beijing's crackdown on homegrown tech giants.
In recent years, China has launched antitrust probes against tech companies, increased oversight of data security, and restricted consumers' usage of internet and gaming platforms. At the same time, China's tech firms are struggling to get users and consumers to spend more amid a cooling economy.
In November, investors including Singapore's Temasek Holdings, Tencent, and Alibaba injected $500 million into Xiaohongshu, bringing its valuation to $20 billion, Reuters reported, citing sources.
Source: Business Insider