"Youzan is really laying off employees, not only that, but executives are also leaving," a source told Sina Technology.
In June 2017, Youzan founder and CEO Bai Crow (real name: Zhu Ning) confirmed that Chen Jinhui, former vice president of Baidu Takeaway, joined Youzan as vice president and was responsible for channels.
At the time he uttered an impressive quote — "No software company in the world hoards talent and values products and technology as much as we do." Now and in the future, some people who have a like will stick to the technology of more than 50%, while others will insist on selling more than 60%."
However, just this month, Youzan launched the first round of layoffs. The first thing to be cut is product and technology research and development. In addition, Sina Technology also learned that Chen Jinhui, vice president of Youzan, has left his post in October 2021.
More importantly, a number of sources who accepted the layoffs confirmed that Youzan did write "personnel optimization" into the OKR in 2022 - the overall number of people outside the direct front-line sales decreased by a certain proportion throughout the year, optimized the target management and iteration mechanism to ensure the energy on the core goal, reduced the collaboration chain and functional modules, and ensured the action force and collaboration efficiency.
Some insiders expect that youzan is expected to lay off more than 1,500 people in this round. "When there were the most likes, there were more than 4,700 people." The above-mentioned source said that from the OKR point of view, functional departments and departments of a middle-office nature such as products and technologies will be the hardest hit areas for layoffs.
High investment is difficult to exchange for high growth, and the contraction of layoffs with praise seems inevitable. Sina Technology asked a person related to Youzan for verification on matters such as layoffs, but the person did not give any reply. As of press time, Youzan has not responded to the layoffs.
Those "weird" corporate cultures
In January 2019, the White Crow was controversial for announcing the implementation of the "996" working system at the Annual Meeting of Youzan. In addition, Youzan also implements quarterly inspection of cultural values, and accounts for more than the performance part of the assessment.
From some of the expressions of the employees who have praised, we can glimpse the corporate culture and values of the praise:
"In the induction training with praise, White Crow was said to be the best product manager in China."
"Youzan likes to hang a lot of banners in the office, which say words like don't take a needle and a thread from a customer."
"What's even more bizarre is that if you make small daily mistakes such as not closing the door and forgetting to turn off the lights, you will be criticized by posting notices, and many places will post, even paste to the toilet, many people have to go to the toilet, then they can see." The announcement will be displayed for a long time, and it is indeed a little disrespectful to people. ”
"The number of new people who like it has been reduced by half."
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A zan insider revealed that many people who go from Internet manufacturers to Zan cannot adapt to such a corporate culture. "The turnover rate of people with likes is still relatively high, and only about 50% of those who can work with likes for more than a year are about 50%."
On the contrary, the senior management team with praise is relatively stable. Most of the executive teams brought in from the outside report to the founding team, while Chen Jinhui is one of the few relatively high-level management teams brought in from the outside. In April 2014, he became the vice president of Baidu Takeaway, responsible for channels. In June 2017, Chen Jinhui joined Youzan, also responsible for the channel.
Because of this, his departure seems more abrupt. In October 2021, Chen Jinhui resigned from Youzan, internally saying that his departure was due to physical reasons. In December, Chen Jinhui's assistant in Youzan also left.
In December 2021, there were also signs of Youzan's layoffs, as some employees who voluntarily left found that their departure dates were advanced. One of the departing employees told Sina Technology that he had originally applied to leave on January 6, 2022, but was unexpectedly seen by his colleagues in human resources as "rubbing 3 days of salary on New Year's Day", and let him leave on December 31. "They even took my place and changed my resignation application date directly to December 31 in the OA system."
There are not a few people who have similar experiences with him, and without exception, they have advanced the planned departure date by 6 days.
Then the layoffs came suddenly.
"Half of the analysis last night was forced to leave, and then it was only handed over to other colleagues. Half of the second group on the back end is gone," says several laid-off employees.
In addition, some laid-off employees said that the layoff list was provided by the direct supervisor, the reasons for the layoffs were various, and when they were further questioned, they were told that "each group has indicators".
Layoffs, the bitter fruit of being swallowed after radicalization
"After this round of layoffs, there may be Zan returning to the level of the beginning of 2019, but in fact, in terms of Zan's business volume, there is still room for continued layoffs." On the pulse, a staff member who has a thumbs up said so.
Also at the 2019 annual meeting, the white crow announced "996" at the same time, but also said that Youzan in 2018 expansion is too fast, too much redundant, need to reduce a lot of staff in 2019.
Founder and CEO of Youzan White Crow
The actual situation is that the number of employees with Zam continued to increase in 2019, because the financing of Youzan was relatively smooth. On 3 April 2019, Youzan announced that the Company entered into a subscription agreement with five subscribers on 2 April, and through this financing, Youzan's net proceeds amounted to HK$910 million. More importantly, Tencent, which was laying out the industrial Internet at that time, added praise in the current round of financing.
In August of the same year, Youzan once again received a $30 million strategic financing from Baidu, which was completed in May 2020, when Baidu was beginning to lay out live streaming with goods. In addition, in April 2020, Youzan raised about $100 million through the placement of shares.
White Crow has bluntly said that it is rare to get bat support at the same time in the Bayonet-like Chinese Internet jianghu.
But what he did not explain is that the objective environment has fattened up Youzan, also because of the objective environment and its own shortcomings, and Youzan has quickly been beaten back to its original form.
At the beginning of 2020, under the influence of the epidemic, online trading and live streaming have become the main sales methods, so SaaS (software as a service) service providers such as Weimob and Youzan are also highly sought after by capital.
Under the pursuit of capital, with the help of a good financing environment, Youzan on the one hand financing, on the other hand, a large expansion, the loss is also gradually expanding.
Youzan's financial report for the first three quarters of 2021 shows that the current revenue was 1.176 billion yuan, down 9.9% year-on-year. Operating loss was $759 million, more than double the operating loss of $356 million for the same period in 2020. The loss for the period was $670 million, nearly double the loss of $340 million for the same period in 2020.
Among youzan's revenue, subscription solution revenue was 740 million yuan and merchant solution revenue was 430 million yuan. According to the financial report, in the first three quarters of 2021, the number of new paid merchants in Youzan was 32,700, of which the number of new paid merchants in the third quarter was 13,700, an increase of only 6% year-on-year. As of the end of September 2021, the number of paid merchants with a stock of likes was about 90,300, an increase of only 3% from the end of June.
In fact, the recession of Youzan has already occurred in the second quarter of 2021, mainly due to the rapid contraction of GMV (total transaction amount) from Kuaishou.
"Youzan used to be highly dependent on Kuaishou, but youzan's irreplaceability in the Kuaishou e-commerce ecosystem is very weak, so it has led to Youzan being gradually abandoned by the platform." A former employee of Youzan said that this is a common problem that Youzan has in the face of large platforms such as Douyin and Kuaishou.
In the early days of the layout of e-commerce in Kuaishou and Douyin, in order to quickly build a service system for merchants, they generally choose to cooperate with SaaS service providers to quickly build corresponding e-commerce transaction capabilities for small and medium-sized enterprises on the platform.
Youzan provides software, payment and other toolkits for small and medium-sized e-commerce enterprises on platforms such as Kuaishou, Douyin and WeChat to help them quickly open up business links. The Kuaishou platform was once the largest source of GMV in Youzan, once contributing about 40% of its GMV.
However, after the platform's e-commerce business took shape, they all began to transition to providing their own toolkits for platform merchants. "Having a thumbs up is not irreplaceable and can be discarded at any time. Of course, this is not only a compliment, other platform-dependent tools and service software are almost the same end. The former employee said.
Youzan's financial report for the first half of 2021 shows that in the first half of the year, Youzan's GMV was 48.1 billion yuan, an increase of only 4% year-on-year. But in the second quarter of 2021, the GMV of Youzan was 24.5 billion yuan, down 4.6% year-on-year.
"Kuaishou is still trying to develop its own e-commerce transaction closed loop, so the transaction volume we generate from Kuaishou continues to shrink." After Youzan's financial report in the first half of 2021, Yu Tao, CFO of Youzan, said, "The GMV in the first half of Youzan is not ideal, mainly due to the decline in GMV from the Kuaishou channel, and the proportion of GMV on the Kuaishou platform in the overall GMV fell to 20% in the first half of 2021." It is expected that the proportion of Kuaishou GMV will drop to 10%-15% throughout the year.
Since the backdoor listing in 2018, Youzan has never achieved profitability, and the main reason for Youzan's loss is that administrative expenses such as employee salaries, sales expenses, and research and development expenses are too high.
In the short term, it is still difficult for Youzan to see the possibility of profitability, and as the GMV contributed by platforms such as Kuaishou gradually declines, Youzan's revenue growth will gradually slow down, and even continue to decline.
On February 17, 2021, Youzan's stock price reached its highest point, with a market value of more than HK$77 billion, an increase of nearly 7 times over the beginning of 2020, and was once a star stock in the capital market. But at the close of the most recent trading day, Youzan's share price was only HK$0.375, less than one-tenth of its market capitalization at its peak.
Income does not go up, the financing environment is not good, through layoffs and throttling, it has become the only choice for you to survive.