Financial Associated Press | New Consumption Daily (reporter Gao Mengyang Li Danyu) news, from the rapid expansion to the reduction of layoffs, Youzan only took half a year.
A few days ago, some media reported that there were praises (08083. HK) will soon lay off a large number of people, numbering about 1,500 people. According to the report, Youzan wrote "personnel optimization" into the OKR in 2022. At the same time, Youzan Vice President Chen Jinhui has left in October 2021.
It is worth noting that youzan officials did not officially respond to the relevant rumors such as layoffs, but announced on the evening of January 21 that it had officially opened the adjustment of the business department and split the front desk business into five major business departments: social e-commerce, new retail, beauty, education, and Allvalue.
However, Ding Yang, a staff member who recently left, disagreed.
"Youzan's financial growth in the first half of 2021, so Q3 began to expand on a large scale, the scale of personnel increased rapidly, and many of the laid-off personnel worked only three or four months." Ding Yang told the New Consumption Daily that the layoffs with praise are not laying off more than 1,500 people at once, as the outside world speculates, but are laying off people in a rhythmic and planned manner. "About 50 progress per day, almost 400 people have gone."
According to the new consumption daily, Chen Jinhui has been equivalent to the resignation state as early as the beginning of 2021, except that some of the work needs to be handed over, and only retains the identity of the so-called consultant.
At present, whether it is layoffs or the "adjustment" mentioned by Zan, Youzan, who once had outstanding performance during the epidemic, has once again fallen into crisis. And this crisis has long foreshadowed.
There are praises when layoffs are underway
After the outbreak of the epidemic in 2020, many industries have had to do digital and online transformation, and youzan, who has been deeply involved in the field of enterprise services, has ushered in a positive.
According to its 2020 third quarter report, as of September 30, 2020, Youzan's revenue was 1.307 billion yuan, an increase of 65.4% year-on-year, the service merchant GMV was 72.3 billion yuan, an increase of 90% year-on-year, and the existing paid merchants rose to 97,800, an increase of 19% over the same period.
At the same time, Youzan once performed well in the secondary market, with the stock price rising by as much as 367% in 2020, reaching a peak of HK$4.5 per share in 2021, an increase of 574.14% compared with HK$0.58 per share at the beginning of the listing in 2018, and Youzan's market value also rose from HK$6 billion to HK$51.95 billion on March 2, 2021, an increase of nearly 9 times.
However, for a long time, Youzan has been in a state of increasing revenue and not increasing profits.
In recent years, Youzan has been in a state of loss, in the first three quarters of 2021, Youzan recorded a gain of about 1.176 billion yuan and an operating loss of about 759 million yuan, which has far exceeded the operating loss of 356 million yuan in 2020.
Since mid-January, there have been news of layoffs.
According to Zhang Lin, an employee of the Youzan testing department, the layoffs have been carried out to the second wave, and according to his understanding, the turnover rate of some departments has reached 40%. "The layoffs are expected to be completed years ago, but the scale of the layoffs has not yet reached the figure mentioned in the report, so employees basically have no intention of working."
A number of employees who have left the company told the New Consumption Daily reporter that the general entry time of the laid-off employees is not long, and many departments have praised the recruitment of personnel in the Q3 quarter, and some employees have been hired for less than two months.
"There is a group of 13 people, and 4 people have been laid off", Zhang Lin believes, which is related to Youzan's large-scale expansion in the second half of 2021. In his view, the management did not accurately judge the market situation, and after the large-scale recruitment, due to the sharp decline in the market situation, there was another large-scale layoff.
Since the layoffs involved many new employees who had been employed for less than half a year, the issue of compensation has not been uniform.
According to information on a workplace social platform, during the conversation between the employees and HR on the issue of compensation, HR said that if it entered the arbitration procedure, it would affect the future back adjustment. Some certified employees claim N+1 compensation.
Ding Yang revealed that everyone's situation is different and should be determined according to HR conversation. Generally, HR will not take the initiative to say compensation, and will recommend employees to take the initiative to leave. If the employee insists on compensation, arbitration is involved.
It is understood that in the layoff storm, technology development positions have become the hardest hit areas, and this part is also its focus on expansion in 2021. According to the financial report, as of September 30, 2021, Youzan employed a total of 4358 employees, and the proportion of technology and product developers reached nearly 40%. Its research and development expenditure in the first three quarters of 2021 reached 480 million yuan, an increase of 50% year-on-year.
There are rumors of liking layoffs this time, not only involving ordinary employees, but also involving senior management.
A few days ago, some media reported that Chen Jinhui, who served as vice president of Baidu takeaway and then joined Youzan as vice president in June 2017, also left his job before the end of 2021.
However, according to the New Consumption Daily reporter learned from Youzan insiders, Chen Jinhui had left his job as early as the beginning of 2021, except for some of the work that needed to be handed over, only retaining the identity of the so-called consultant.
In response to the above-mentioned layoff news, the new consumer daily reporter asked youzan for verification, and there was no response as of press time. Youzan only said that it will officially open the adjustment of the business department and split the front-end business into five major business units: social e-commerce, new retail, beauty, education, and Allvalue.
Is company culture and internal management the internal causes of layoffs?
New Consumption Daily learned that the incompatibility with the culture of praise has become the reason for many respondents to be dismissed. At the same time, many respondents believe that there are problems in the company culture and internal management.
Previously, among the many stories about the creation of Ariam, the "Taibai Mountain Hike" was the founder White Crow's favorite. "Physical strength alone is not enough, one person can go very fast, and a group of people can go far. That's why I took them on a hike, and I want them to learn that for themselves. ”
(Youzan team hiking in Taibai Mountain)
"All new employees are asked to learn from the old employees about the founding team's Taibai Mountain hike." Zhang Lin revealed that there is a so-called "old employee culture" in Youzan. The corporate culture of praise is heavy, and new employees who have just entered the company cannot express their ideas first, but must first learn from old employees. "Taking Chen Jinhui as an example, when he first joined the company, he did not report to the white crow, but to the coos in the founding team."
Zhang Lin revealed that slogan management is also very common in Youzan, and he likes to pull banners in the office area.
In fact, although the corporate culture in the eyes of the outside world is controversial, its founder White Crow has always been "proud".
In 2019, the White Crow's views on the 996 working system expressed at the China Youzan Annual Meeting also caused an uproar in public opinion.
At that time, Youzan internal employees revealed that their remarks mainly included that the post-95s were not industrious, people should not take more than a week's leave, cancel team building expenses, and needed to be reported by the CEO for more than three days, and said that the company would implement the 996 work system.
In order to support his point of view, White Crow also quoted the story of a Huawei executive in disguise to advocate that employees can divorce when work and family conflicts occur. Even after being widely questioned by outside public opinion, White Crow still posted in the circle of friends, "Looking back a few years later, this is definitely a good thing." ”
At that time, The White Crow even proposed the so-called "enjoy" corporate culture, specifically:
- E/ To experience to feel,
- N/ The courage to accept new people, new things, new ideas, and new challenges,
- J/ and try to enjoy everything that work and life brings,
- O/ Cherish every opportunity,
- Y/ Rely on yourself and be the best version of yourself.
But some old employees told the new consumption daily that the so-called enjoy culture, they do not have a day of enjoy, but the boss is in enjoy.
"I didn't stay for a few days, I wanted to leave." Li Qiang joined Youzan in the middle of the year, and he believes that the management of Youzan has a pompous style, and the form is greater than the content. There is a problem with the internal assessment mechanism, and in order not to be eliminated, the internal personnel will pursue performance too much, and will choose to quickly become a bright work and push the difficult work to others. "What's more, in order to reflect their own value, they will create demand and products out of nothing, resulting in waste of resources." This situation is also available to many Internet companies, but the likes are more obvious. ”
It is worth noting that after the layoff storm broke out, White Crow announced the upgrade of the company's mission and vision, transforming "continuing to be an enjoy organization" into a "beautiful organization that achieves excellent talents".
The employee joked: "This is just saying that the 1,500 people who were laid off are not good enough." ”
The main business is squeezed, and it is not easy for Youzan to cross the robbery
At present, Youzan's inability to cope with changes in the external environment is also an important reason for his current predicament.
According to youzan's financial report, subscription solutions and merchant solutions are its main sources of revenue. The development speed of these businesses is in the hands of some emerging platform parties.
Among them, in the early days, when Kuaishou and Douyin laid out e-commerce, they chose to cooperate with SaaS service providers, which also allowed them to quickly increase the transaction scale.
According to the data, Youzan mainly provides software, payment and other toolkits for small and medium-sized e-commerce companies on platforms such as Kuaishou, Douyin and WeChat, and the Kuaishou platform was the largest source of GMV of Youzan, contributing about 40% of its GMV at its peak.
After the platform itself began to provide toolkits to merchants, Youzan's business was seriously affected. "Kuaishou is still trying to develop its own e-commerce transaction closed loop, so the transaction volume we generate from Kuaishou continues to shrink."
Yu Tao, CFO of Youzan, once said that the GMV in the first half of the year was not ideal, mainly due to the decline in GMV from the Kuaishou channel, and the proportion of GMV on the Kuaishou platform GMV in the whole 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.
Ding Yang said frankly that this change has had a great impact on the entire e-commerce SaaS industry, and the anti-monopoly cooperation between traffic platforms has provided convenience for platform merchants, and the main markets of enterprises such as Youzan have been greatly squeezed.
However, these "sprouts" that have already appeared in the first half of 2021 have not received attention from the relevant levels of Youzan. At the same time, Youzan also put forward the goal of developing new retail, beauty industry, education and other fields, and began to recruit a large number of new students.
At that time, Youzan's large-scale expansion may be related to its application to the Stock Exchange for the listing of Youzan Technology shares on the main board of the Stock Exchange by way of introduction. "Youzan may think that after the financing channel is opened, the problem of funds and losses will be solved, so it will expand the business and the number of employees." E-commerce analyst Chen Hudong told reporters.
Zhang Lin believes that in the expansion in 2021, the management actually did not clearly recognize its position in the Kuaishou e-commerce system, or the expectations for new business were too high, which also led to the rapid expansion of the organizational system and then contraction again. From now on, service providers such as Youzan are gradually being abandoned by large platforms.
Soon, however, the situation took a sharp turn for the worse.
At 24:00 on the evening of November 15, Kuaishou E-commerce decided to perform a third-party broken chain operation on Youzan and Magic Chopsticks - from now on, it will no longer support the three-party products with Likes and Magic Chopsticks in the live broadcast room, but the sale of third-party products through short videos, personal homepages, store pages and other channels will not be affected.
The Kuaishou platform was once a very important growth engine for Youzan, and after the broken chain, Youzan said, "This adjustment only affects the live link scene of Kuaishou e-commerce promotion, and does not affect the promotion of short videos, personal homepages, and store pages in Kuaishou, and consumers can place orders to buy normally." But it also makes the market lose further confidence in it.
Subsequently, in December 2021, China Youzan issued an announcement that considering the progress of the listing application, it was impossible to complete the listing process of its holding subsidiary Youzan Technology and the privatization process of China Youzan Technology before the agreed date, so it was decided not to promote the process of privatization and the listing of Youzan Technology.
After the failure of this privatization, under multiple factors, Youzan began to lay off employees and adjust the business unit.
Dante Yang believes that this adjustment has been falsified before. "Vertical markets such as new retail, education, and beauty, which have invested heavily before, have not yielded considerable returns, which also shows that the difficulties of praise will continue."
According to Xiaoqing, an employee of Youzan, youzan has no choice but to develop other businesses, and the number of merchants supporting the main business is showing a downward trend, and if there is no new business attraction, revenue growth will become a problem.
Affected by the layoffs, China Youzan's stock price has been hovering at a low place, falling by about HK$70 billion from its market capitalization high in February 2021.
"Youzan is not calm enough in operation, and in order to attract investment, he will only create concepts and frequently change strategies. If the management problem is not fundamentally solved, the cost savings of layoffs will only be a drop in the bucket for Youzan. Zhang Lin believes that the pressure of the capital chain of Youzan will continue, on the one hand, there are problems in the management of Youzan, on the other hand, in the context of interconnection, the market of Youzan is rapidly shrinking.
(At the request of the interviewee, Ding Yang, Zhang Lin, Li Qiang, and Gong Xiaoqing are pseudonyms)