Chinese social media and e-commerce platform Xiaohongshu is undergoing a round of layoff, with roughly 10% of its workforce involving in the process, according to Chinese career and social networking platform Maimai.
In a post on Maimai, a couple of unidentified Xiaohongshu employees disclosed that the layoffs affected multiple departments in Beijing and Shanghai office, and targeted mostly fresh graduates and employee under probation period.
The company said the move is part of business restructuring efforts, though a more precise explanation would be soaring labor costs.
Citing source close to the matter, Chinese media outlet Jiemian reported a number of employee were informed to leave shortly after receiving the official explanation.
In China, companies are required to give a month's notice if they plan to fire more than 20 employees due to restructuring or other streamlining measures. This gives the workers time to find new jobs
Founded in Shanghai in 2013, Xiaohongshu had amassed more than 200 million monthly active users (MAU) as of December 31 2021, around 70% of Xiaohongshu’s MAU are younger generation users which were born in 1990s or later.
Many celebrities, fashion stars have promoted products and service to users by opening social channels on the platform.
The Shanghai-based company, whose backers include Tencent Holdings, Alibaba Group and Singaporean state investor Temasek Holdings, completed a $500 million fundraising round in November that valued it at as much as $20 billion.
Its layoffs follows similar moves by other Chinese tech giants, including Alibaba and Tencent.
Chinese media reported that Alibaba and Tencent would together cut tens of thousands of jobs this year in one of their biggest rounds of layoffs as they tried to deal with a declining revenue due to economic slowdown and Covid-19 outbreak.