SHANGHAI (Reuters) - Didi Chuxing will lay off 15 percent of its staff or about 2,000 people this year, a source said, marking the ride-hailing firm’s first major cut back as it grapples with regulatory scrutiny and public backlash over the murder of two of its users.
Didi CEO Cheng Wei said at a meeting with management that the firm would focus on core mobility services and cut business units considered not critical to its main ride-hailing business in 2019, according to the source familiar with the matter.
But the Chinese ride-hailing giant will aim to hire more than 2,000 employees to focus on safety technology, product engineering and international expansion with the goal of maintaining its overall employee count, the source added on condition of anonymity as the information is not public yet.
A Didi spokeswoman declined to comment. Reports on possible job cuts at the company began to surface in late January.
Didi has been working to address consumer and government concerns over safety after a passenger was raped and killed by one of its drivers in August last year, about three months after another Didi user was murdered. A Chinese court has sentenced a man to death for the crime committed in August.
Concerns about safety have hobbled growth plans for Didi.
Didi, which successfully drove U.S.-based rival Uber out of China in 2016 to becoming the top ride-hailing player at home, is now facing financial strain due to competition from new entrants and the rise of bike-sharing services like Mobike.
This week, Chinese tech news website reported that Didi Chuxing lost 10.9 billion yuan ($1.6 billion) in 2018.
Didi’s valuation exceeded $65 billion after its 2018 funding round and was considering an IPO as early as that year, sources have told Reuters. The privately held firm had been valued at $56 billion in a 2017 fundraising.
Reporting by Josh Horwitz; Editing by Himani Sarkar