Chinese online classifieds platform 58.com has laid off up to 30% of its workforce, according to multiple posts on professional networking site Maimai. The cuts reportedly impacted several departments, including the Technology and Engineering Group (TEG) and Local Business Group (LBG).

Several affected employees described the process as abrupt, saying there was no prior notice. One person claimed they were informed of their dismissal by human resources during a project meeting.

The layoffs come shortly after founder Michael Yao made a high-profile move into the healthcare sector. In June, Yao acquired a 23% stake in publicly listed pharmaceutical firm Yiming Pharma for US$91.1 million through his investment vehicle Beijing Fuhao, becoming its controlling shareholder.

The company is also grappling with rising costs. In the fourth quarter of 2024, 58.com posted a net loss of US$19.7 million despite a 28.5% year-on-year revenue increase to US$306.6 million. Operating expenses during the period ballooned to US$247.1 million.

In a previous internal memo, Yao had emphasized the need to streamline operations by shuttering or restructuring businesses that fail to generate profit. “Unprofitable units must be cut,” he reportedly said.

Founded in 2005, 58.com is often referred to as China’s Craigslist. It provides a wide range of online listings, including job postings, real estate, used cars, and local services. At its peak, the company employed around 40,000 people.

🔗 Source: DoNews

🧠 Food for thought

1️⃣ China’s tech industry downsizing reflects broader economic challenges

58.com’s current round of layoffs continues a pattern begun in 2023 when the company planned to cut approximately 10,000 employees, representing about 30% of its workforce at that time.

This restructuring reflects broader challenges in China’s tech sector, where the rapid growth era has ended and companies are implementing workforce reductions to improve efficiency amid slower economic growth.

The company, often described as “China’s Craigslist,” previously delisted from the New York Stock Exchange in 2020, signaling a shift in business strategy amid changing market conditions and geopolitical tensions.

58.com’s situation mirrors trends seen across major Chinese tech firms, with companies like Tencent also announcing significant job cuts as the industry adjusts to new economic realities 1.

2️⃣ Abrupt layoffs create significant damage to workplace trust and productivity

The “extremely abrupt” nature of 58.com’s layoffs, where employees went from project meetings to dismissal in the same day, likely creates substantial challenges for the organization beyond the immediate workforce reduction.

Research shows that 74% of layoff survivors report decreased productivity after witnessing colleagues lose their jobs, revealing hidden costs that could affect 58.com’s recovery efforts.