Recently, the well-known mainland life service platform “58 Tongcheng” has been exposed to large-scale layoffs, affecting multiple core departments such as the Technology Engineering Group (TEG) and the Local Service Group (LBG), with a layoff rate ranging from 20% to 30%, affecting nearly 10,000 people.
On June 16th, on the mainland professional social platform Maimai, several users certified as 58 Tongcheng employees revealed that the company has been conducting large-scale layoffs recently. Although the compensation package provided by 58 Tongcheng is in accordance with the Labor Law, termed as “N+1”, the lack of prior warning has triggered dissatisfaction among employees. Some employees mentioned that they were in a meeting in the morning, only to be summoned in the afternoon, catching many off guard.
According to multiple employees, this round of layoffs covers departments such as TEG and LBG, with some business units facing a layoff rate approaching 30%.
An employee in a technical position stated that the layoff rate in their department reached 40%, with some departments experiencing layoffs exceeding 60%. Another employee mentioned that some teams were even disbanded directly.
Currently, 58 Tongcheng has approximately 30,000 employees. If a 30% layoff rate is implemented, around 10,000 people may lose their jobs. This is not the first time 58 Tongcheng has conducted large-scale layoffs. In 2023, the company underwent significant layoffs, reaching up to 30% to 50%. At that time, the company stated that the workforce reduction was for “personnel optimization in response to changes in the market environment” but did not disclose specific data.
According to reports on Tencent News, the layoffs at 58 Tongcheng this time are closely related to the decline in its core business. In recent years, the company’s traditional classified information business has faced multiple challenges such as intensified market competition, user experience issues, a single business structure, and the pressure of traffic migration.
The latest financial report shows that in the fourth quarter of 2024, 58 Tongcheng incurred a net loss of 19.7 million US dollars, with operating expenses reaching 247.1 million US dollars, accounting for over 80% of its revenue.
The founder of “58 Tongcheng,” Yao Jinbo, in an internal memo at the beginning of this year, called for the “elimination of business units that cannot achieve profitability within the year,” hinting at the possibility of layoffs and emphasizing the company’s need to “weather the winter” and complete industrial upgrading within three years.
A laid-off employee mentioned that the company’s previous reliance on monetizing traffic has reached its limits, but new businesses have yet to show promise.
Blogger Lu Songsong believes that LBT is the core business of 58 Tongcheng, and even with layoffs in the core business, it indicates that the problems are substantial.