58.com, a Chinese online platform similar to Craigslist, has plans to lay off a significant portion of its workforce, approximately 10,000 employees, indicating the challenges faced by China’s tech industry. The company, founded in 2005 by CEO Yao Jingbo, facilitates connections between local merchants and consumers across more than 400 cities in China. Despite its delisting from the New York Stock Exchange in 2020, 58.com remains a prominent player in the Chinese market.
This move by 58.com reflects the broader issues in China’s tech sector, where companies are grappling with slower growth and economic challenges. The country’s economy had hoped for a robust rebound after the lifting of strict Covid-19 restrictions and the reopening of borders earlier this year. However, the reality has fallen short of expectations, resulting in companies like Tencent Holdings, China’s most valuable tech firm, cutting over 2,000 jobs in the first quarter of the year, as indicated in their quarterly report.
In a move reflecting the challenges faced by China’s tech industry, 58.com, often referred to as China’s Craigslist, is set to lay off around 10,000 employees, which accounts for approximately 30% of its workforce. The company, founded in 2005 by CEO Yao Jingbo, connects local merchants and consumers across more than 400 cities in China. This downsizing decision comes as China’s tech platforms are experiencing slower growth and as the country’s economy struggles to rebound after the relaxation of Covid-19 restrictions earlier this year.
According to Li Chengdong, founder and chief analyst at Beijing-based internet consultancy Dolphin, the days of rapid growth for China’s tech platforms are behind us. Therefore, it is no longer feasible for 58.com to maintain such a large workforce. Instead, the company aims to enhance efficiency and reduce costs by downsizing its employee base.
In 2013, 58.com went public on the New York Stock Exchange, but it recently decided to delist due to escalating tensions between the United States and China. The company was one of many Chinese firms that opted for privatization in 2020, including Sina.com, Changyou (a video gaming company), and Jumei (an e-commerce firm).
As China’s tech industry faces headwinds and the economy struggles to rebound, 58.com, often referred to as China’s Craigslist, is set to lay off around 10,000 employees, signifying the need for greater efficiency and cost reduction. The decision to downsize its workforce reflects the challenges encountered by tech platforms in China’s evolving economic landscape.