couldn't bear it anymore, and Feishu suddenly began to lay off employees
Feishu, a subsidiary of Douyin Group, announced layoffs
Anxious, Feishu made a difficult but necessary decision.
A few days ago, Feishu, an online office software owned by Douyin Group, announced the start of a new round of personnel "optimization", and the layoff rate is expected to reach about 20%.
It is understood that the current Feishu team size remains at about 5,000 people, and the layoffs will involve 1,000 people. Among them, departments such as production and research and customer success are the hardest hit areas, with a maximum of 50% layoffs.
However, during the layoff process, Feishu also made it clear that the company will provide appropriate compensation plans and transfer opportunities for the affected employees to ensure that they can make a smooth transition and reduce unnecessary distress and worries.
Why did Feishu carry out large-scale layoffs? In the all-staff letter, Feishu CEO Xie Xin revealed the core reason.
Source: Feishu
He admits that the team size is relatively large, the organization is not lean enough, and the efficiency becomes low, which is not conducive to the long-term development of the business. "This adjustment is not only an adjustment of the size of the team, but more importantly, it is necessary to return to the day1 state of a start-up company - the direction is more focused, the organization is more efficient, and the team must be more combative. ”
In a word, in order to streamline its scale and improve organizational efficiency, Feishu had to implement major layoffs to push the company towards a more efficient and focused direction.
As a high-profile to B business of Douyin Group, Feishu has been showing steady growth in team size since its commercialization.
In the process, the Feishu team has rapidly expanded, reaching more than 6,000 people at its peak in 2022, and it was even rumored that the number of employees had exceeded 8,000.
Although the number of Feishu team has shrunk to about 5,000 people, it is still outstanding compared to the 2,000 people in DingTalk and the more than 1,000 people in WeChat.
What's more, even though Feishu has a large number of employees, it has not achieved better results. According to the data, as of April 2023, DingTalk has 199 million monthly active users (MAU), ranking first in the industry, followed by WeChat Work with 102 million MAU, and Feishu, which has the most employees, only has 12 million MAU, which is significantly inferior.
图源:QuestMobile
Combined with a set of data, Feishu's software subscription revenue in 2023 will exceed $200 million. However, when we spread this income evenly among each employee, we found that the annual subscription revenue brought by each person was only about 280,000 yuan, which was much lower than the average salary cost of Feishu employees of 800,000 yuan per person.
If Feishu's input and output can be balanced, it may be acceptable. However, it is clear that Feishu's profitability does not match its input costs, and this imbalance indirectly contributes to the implementation of the layoff decision.
What's more, Douyin Group's recent layoffs of the game department and a series of other actions also clearly reflect its strategic determination to "focus on core business" and "eliminate the disease of large enterprises".
This is enough to show that in Douyin's strategic planning, the importance of efficiency is self-evident and the key to its sustainable development.
As far as Feishu is concerned, this round of layoffs is not only an inevitable choice in the market environment, but also a reasonable move in the development of the group. It seems unexpected, but it makes sense.
Mired in a profit dilemma, online office platforms are becoming more and more difficult
Profitability has become a common and thorny problem for players across the online office industry.
Let's take a look at DingTalk first. As one of the most promising businesses in the eyes of Alibaba, DingTalk has officially embarked on the journey of full commercialization since March 2022.
In this process, DingTalk has launched three paid versions: professional version, exclusive version and exclusive version to meet the needs of different users.
Source: DingTalk
At the same time, DingTalk has also innovatively launched three main commercialization models: the annual fee model of three specializations, the platform profit sharing model and the hardware licensing model, to expand its business territory and improve profitability.
However, the current situation is that DingTalk's payment model has not been able to stimulate the enthusiasm of the majority of users, and users are not enthusiastic about this model.
According to relevant data, DingTalk's paying user group only accounts for about 2.5% of its total user volume, which shows that despite a series of efforts, DingTalk has not been able to attract enough users to convert into paying users, and its commercialization process still faces huge challenges.
Also facing this dilemma is WeChat.
Last year, WeCom launched a new feature of "adding friends to charge per person". According to this charging mechanism, enterprises are only entitled to 2,000 free external contact quotas (i.e., all non-internal friends in WeCom).
Enterprise WeChat charging model Source: Niu Reuters
Once this limit is exceeded, the fee will increase in different gradients: 500 yuan per year for 5,000 external contacts, 2,000 yuan per year for 20,000 contacts, and up to 100,000 yuan per year for 1 million.
For those enterprises with more than 1 million external contacts, you need to directly contact the account manager of WeCom to negotiate the purchase.
On the surface, there seems to be nothing wrong with this wave of enterprise WeChat. But in fact, since the launch of this feature, the user experience problem of WeCom has been criticized more and more.
On the one hand, its OA function is relatively thin, whether it is the approval process, personnel management, payment and reimbursement and other core functions, it seems to be imperfect.
On the other hand, when enterprises try to increase external contacts, the process is cumbersome and the effect is limited, and they often need to actively push the WeCom business card and wait for the other party to scan and add it, which is not only complicated, but also inefficient, bringing additional burden to the enterprise.
In addition, WeCom also needs to be strengthened in terms of customer interaction, in addition to the mass sending function is still practical, other interactive tools and functions are inadequate, it is difficult to meet the actual needs of enterprises.
Due to the above reasons, although WeCom has accelerated its pace on the road to commercialization, it has not been able to advance as fast as expected due to poor user experience.
Looking back at Feishu, which was officially opened to the market at the beginning of 2020, its entry time lagged significantly behind that of DingTalk (launched in 2015) and WeChat Work (launched in 2016), and it lost at the starting line from the beginning.
Source: Feishu App
Coupled with the high costs mentioned above, Feishu was unable to firmly occupy market share like pioneers such as DingTalk and WeChat, and was unable to achieve profitability in the short term, so it fell into a bottleneck of development.
Considering the three major online office platforms of DingTalk, WeChat Work, and Feishu, the issue of profitability has always been a threshold that is difficult to cross.
Under the common goal of pursuing profits, Feishu, which is at a disadvantage, will inevitably need to adopt stronger strategies and measures in order to prove its worth.
Perhaps this is why Feishu has taken more radical measures to seek a breakthrough.
There is no winner-takes-all in the online office industry
As we all know, most online office platforms initially offered free services. Even now in the paid era, the majority of users still choose to use only free features.
Therefore, for online office platforms, the first challenge has always been how to convert a large group of free users into paying users to solve the commercialization problem.
And this is a big problem for all players.
In particular, Feishu has to be crushed by DingTalk and WeChat Work in the domestic market, and needs to compete with industry giants such as Google, Microsoft, and Salesforce in the overseas market, which can be described as a challenge.
However, then again, most of the online office products in the overseas market are mainly based on a single function, such as documents, forms, online meetings, etc., each with its own app, while Feishu, a comprehensive and comprehensive online office platform, is relatively scarce, and the market potential should not be underestimated.
Perhaps, after this downsizing, Feishu will focus more on overseas markets to enhance product competitiveness and improve profitability.
Closer to home, from a global perspective, the online office market is still full of business opportunities. According to the data, the size of the enterprise collaborative office market in 2019 was US$31 billion, and it is expected to reach US$48.1 billion this year, with an overall market growth rate of nearly 10%.
In the face of attractive market dividends, the development pattern of online office platforms is difficult to form a winner-takes-all situation. Therefore, all platforms must keep a clear head, find the right pace of development, and seize every opportunity to try to break through.
Author | Li Xiang