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Three major business departments of Meituan reportedly made layoffs – Pandaily

Reports have recently surfaced in Chinese media alleging that local e-commerce and service platform Meituan has launched a series of layoffs covering its online ride-sharing service, its grocery e-commerce platform Youxuan and its hotel and travel division.

“All the conference rooms were booked by the human resources department last Friday. Two more rounds of layoffs will begin soon. The whole process will be completed by the end of April,” Caixin reported Monday, quoting Meituan initiates.

According to the company’s financial report, its revenue was 179.1 billion yuan ($28.1 billion) in 2021, up 56.0 percent year-on-year. Net loss and adjusted net loss reached 23.5 billion yuan and 15.6 billion yuan, respectively, mainly due to poor performance of new businesses. The financial report shows that the new venture lost 38.4 billion yuan last year, and the operating loss rate increased 36.6 percent year-on-year.

Previously, due to the unsatisfactory performance of its community group purchasing industry, rumors of layoffs at Meituan Youxuan surfaced. However, this is the first time that the layoffs have extended to online carpooling and hotel and travel service.

In July last year, national carpooling giant Didi’s 25 apps were pulled from digital shelves, leading to fierce competition among new players. Meituan also restarted its online carpooling business. However, according to data from the Chinese Ministry of Transport, compared to other platforms such as T3 Go and CaoCao Mobility, Meituan’s order volume hasn’t increased much.

The hotel and travel division remains the biggest source of profit for Meituan. In 2021, its revenue reached 32.53 billion yuan, up 53.1 percent year on year, while operating profit was 14.093 billion yuan, up 72.3 percent year on year. The operating profit rate also fell from 38.5% to 43.3% in 2021. However, the recent outbreak of COVID-19 may negatively impact the division.

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Recently, many Chinese Internet companies have reportedly made internal layoffs. The Cyberspace Administration of China (CAC) said on April 8 that, based on interviews with 12 industry companies, including TencentAli BabaMeituan and JD.comthe combined number of departing employees and new employees at these 12 companies was 216,800 and 295,900 from July 2021 to mid-March 2022. Surprisingly, 11 of these companies hired more new employees than they took on have left.