On April 21, a news about the layoffs of Xiaohongshu was on the Pulse Hot List, and the entry “Xiaohongshu was exposed to lay off 20% of the overall workforce” also quickly became a hot search. Some Xiaohongshu employees broke the news that they were suddenly notified of the last day on the same day. There was only notification, no room for communication, and the compensation method was N+1, but they could not get year-end bonuses. Xiaohongshu usually issues year-end performance bonuses at the end of April every year. The reporter asked Xiaohongshu to verify the rumors of layoffs. As of press time, Xiaohongshu has not responded.
On the evening of April 21, the WeChat public account “Shanghai Internet Rumors” stated that Xingyin Information Technology (Shanghai) Co., Ltd., the operating company of Xiaohongshu, said that the “overall layoffs” reported on the Internet were actually normal personnel replacement.
20% layoffs were reported
On April 21, Xiaohongshu was exposed to the news of layoffs. A number of Xiaohongshu employees broke the news on Maimai, saying that they were suddenly laid off by the company, and there was no room for communication.
“Some people were only notified in the morning, and they could leave in the afternoon.” According to the report, although the reasons for HR notification vary, the compensation plans for the laid-off Xiaohongshu employees are mostly the same: “N+1” Compensation, no year-end bonus and performance bonus. One of the employees also questioned that he was asked to leave on April 29 because the company did not want to give a year-end bonus (originally scheduled for April 30).
Some job seekers revealed that they had passed the interview of Xiaohongshu before, but were suddenly told that there were no more places. However, some job seekers reported that they only received a recruitment call from Xiaohongshu a few days ago. There may be a situation of “hiring and laying off people at the same time”.
According to media reports, the layoff of Xiaohongshu is 20% of the overall layoff, and many departments have been affected. Regarding layoffs, there is another way of saying that the layoffs “belong to normal inventory optimization, which belongs to the last elimination, fattening and thinning, and recruitment will start after optimization, but the recruitment volume is not large.” Regarding the above-mentioned layoff rumors, the reporter of e company asked Xiaohongshu for verification, but as of press time, no response was received.
On the evening of April 21, the WeChat public account “Shanghai Internet Rumors” posted: Recently, there is news that the social platform APP Xiaohongshu is undergoing overall layoffs. “Many employees were notified that day and asked to resign, and there is no room for communication.” It is mentioned that the proportion of laid off employees accounts for about 20%.
In this regard, Xingyin Information Technology (Shanghai) Co., Ltd., the operating company of Xiaohongshu, said that the “overall layoffs” reported on the Internet are actually normal personnel replacements.
Xingyin Information Technology (Shanghai) Co., Ltd. said that since March, Xiaohongshu will carry out the annual performance appraisal of the company as usual, and will carry out normal personnel replacement based on the results of the annual performance appraisal. The assessment is for all regular employees (including employees during the probationary period), and employees with unqualified performance usually account for about 10%.
This time, more than 200 employees were negotiated to terminate the labor relationship due to unqualified performance, accounting for about 9% of the total number of employees, which did not match the “20%” ratio in the news on the Internet. For the employees involved, the company is properly carrying out negotiation work, conducting one-to-one communication, negotiating with them to terminate the labor relationship in accordance with the labor law and other relevant regulations, paying N+1 economic compensation, and doing a good job in protecting the rights and interests of employees.
The article also stated that the current number of employees and business development of Xiaohongshu are generally stable.
It has been rumored to be “sprinting to the market” many times
Xiaohongshu, established in 2013, has attracted a large number of amateurs and experts in recent years, and has gradually formed a gathering place for lifestyle and grass growing. In the past two years, the news of Xiaohongshu’s sprint listing has been reported many times, and the organizational structure has also been adjusted many times.
In March last year, Yang Ruo, the former managing director of Citigroup’s TMT investment banking department in Asia Pacific, will join Xiaohongshu as the company’s CFO. In response, Xiaohongshu said: Yang Ruo will be responsible for the formulation of the company’s financial strategy, financial management and internal control in the future, and the company has no IPO plans yet.
In October last year, it was reported that Xiaohongshu was considering shifting its listing location from the United States to Hong Kong, China, and conducting a Hong Kong IPO of at least US$500 million. Xiaohongshu has responded that the company will maintain communication with the capital market in stages, but there is no clear IPO plan yet.
On January 25 this year, Xiaohongshu merged the original community department and e-commerce department into a new community department. In February, according to media reports, Liu Huantong (flower name: Jess), the head of Xiaohongshu e-commerce, had resigned in January, and Xiaohongshu confirmed the news.
According to public data, Xiaohongshu, which was established in June 2013, has completed multiple rounds of financing. A round of US$500 million financing was led by Temasek and Tencent, and old shareholders such as Ali, Tiantu Investment, and Yuansheng Capital followed the investment. The post-investment valuation was as high as US$20 billion. In this regard, Xiaohongshu said that this round of financing is mainly based on the increase of old shareholders.
In addition, in June 2018, Xiaohongshu received a $300 million Series D financing led by Alibaba. However, according to people familiar with the matter, Xiaohongshu also conducted a round of private financing in the first half of 2020. At that time, its valuation had reached 5 billion US dollars, and by the end of 2020, it will rise to 6 billion US dollars.
Station B and Zhihu were also exposed to layoffs?
In addition to Xiaohongshu, recently, a rumor that the live broadcast department of station B may lay off the entire staff has also spread on the Internet. For more information, please see “Bilibili Live Streaming Layoffs? U.S. stocks fell more than 8% at the opening, the company responded: continue to invest in live broadcast business”
It is understood that an anonymous source recently revealed that the live broadcast business department of station B is about to lay off staff, and the layoff list has been preliminarily drawn up. After the Shanghai area returns to normal, layoff interviews will be held. This layoff will affect the entire live broadcast department. The reason for this layoff may be the imbalance between the live broadcast area of station B and the guild. The live broadcast department “allows” the guild to use unlimited rebates that are higher than the industry standard, resulting in an ecological imbalance in the live broadcast area.
In this regard, on April 18, the relevant person in charge of station B responded that the live broadcast business is currently developing normally, and the gross profit margin has continued to increase for three consecutive years.
The person in charge also said that the company will continue to invest in the live broadcast business as a platform capability for creators to enhance real-time interaction. “We will continue to recruit and iterate the talent echelon, and we are still recruiting outstanding talents, with more than 40 positions in the pipeline.”
In addition, it is reported that there are large-scale layoffs in the Zhihu video department, accounting for 60% of the operation team. Some internal employees said that this layoff is equivalent to changing the blood of the video. For example, the video production department has been cut from more than 20 people to only 8 people. Another department responsible for the operation of video creators has also been cut from more than 30 people to only single digits.
On April 19, Zhihu responded that “there is no layoff plan”. And said that video is an indispensable part of Zhihu’s content ecology. In 2022, we will continue to make efforts and improve in the video field. Zhihu has no layoff plan in the video business, and it also welcomes outstanding talents in the video business, especially in product and operation positions.
Source: Securities Times
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