Xiaohongshu reportedly cuts underperforming staff

Chinese social platform Xiaohongshu is reportedly cutting about one-tenth of its staff amid the authority's crackdown on tech companies. 

According to multiple reports including Reuters and theSouth China Morning Post, the layoffs were the results of an annual performance review conducted in March, in which the company found that about 10% of its employees' performances failed to reach expectations. Also, it was reported that the layoffs were first covered by local Chinese media outlets. Reuters' report said the layoffs affected multiple departments of the company in Beijing and Shanghai.

MARKETING-INTERACTIVE has reached out to Xiaohongshu for more details. 

Tech companies have been facing difficulties since last year as the Chinese government tightened its grip on the sector. For example, a report from the South China Morning Post said that Kuaishou, ByteDance and streaming platform iQiyi were laying off their staff. The report stated that while it is common for Chinese tech companies to sack underperforming employees at the end of each year, the scale of staff cuts was bigger than usual given the Chinese government has been cracking down on the tech sector this year. The report said Kuaishou had started laying off employees who received low scores in performance reviews. These employees had been offered compensation based on the years they had served, in addition to a month's salary. Kuaishou had also laid off highly-paid team leaders, which reportedly has caused further panic among employees.

Meanwhile, iQiyi has also been trimming more than 30% of jobs at departments using a lot of the company's budget, including marketing and distribution. The employees required to leave have been offered similar compensation as their counterparts at Kuaishou. The report added that lay-offs may continue through Chinese New Year.

Moreover, several members of Chinese tech companies management stepped down recently. JD.com's founder Richard Liu stepped down as CEO of the company and succeeding him is current president Xu Lei in April. Liu continues to remain as the chairman of the board and focus on guiding the company’s long-term strategies. In January 2022, Alibaba Group chairman Daniel Zhang left the board at Weibo and replacing him was Chris Tung who is currently the CMO of Alibaba Group. Tung was also previously CEO of VML China and served as vice president of marketing at PepsiCo China.

Kuaishou's CEO Su Hua left the position in November 2021 and was replaced by co-founder Cheng Yixiao, while ByteDance founder Zhang Yiming also stepped down as chairman of the company in the same month. 

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