China's Didi Global Plans 20% Layoff Ahead of Hong Kong Listing

[Image source=Yonhap News]

[Asia Economy Reporter Kim Hyunjung] Chinese ride-sharing company Didi Global is expected to cut up to 20% of its workforce ahead of its Hong Kong listing.

On the 15th (local time), Bloomberg News, citing multiple insiders familiar with the company's situation, reported that the company will implement layoffs to reduce costs before the listing.

However, the impact of the layoffs is expected to vary by business sector. Another insider explained, "Some divisions such as Didi Finance, which is expanding overseas, and the autonomous driving business will be less affected."

Contrary to pressure from China, Didi, which conducted a $4.4 billion (approximately 5.269 trillion KRW) initial public offering (IPO) in the United States last June, also underwent a high-intensity cybersecurity investigation by Chinese authorities. Shortly after, its service was suspended on Chinese app stores.

A few months later, Didi announced plans to withdraw its listing from the New York Stock Exchange and instead list in Hong Kong, which the news agency reported was to alleviate concerns about potential data exposure overseas.

Didi also plans to cut up to 15% of its workforce in its core ride-hailing business. The ride-hailing business in China suffered profitability hits due to price pressure from intensified competition last year, and with recent growth slowing, the company is said to be reorganizing its structure to fit its scale.

Didi's stock price has fallen nearly 70% compared to its offering price. Headquartered in Beijing, the company’s quarterly losses worsened to $4.7 billion as revenue declined following the Chinese government’s security investigation. At that time, the government reportedly imposed a fine of about 10 billion yuan (1.8852 trillion KRW).

This content was produced with the assistance of AI translation services.