By Josh Ye
HONG KONG (Reuters) – Chinese social e-commerce app Xiaohongshu, known as China‘s answer to Instagram, has kicked off a round of layoffs, a source familiar with the matter said, as the company joined other internet firms in retrenching.
The layoffs were first reported on Thursday by local media outlets such as Sina Technology, which cited social media postings by employees. Sina Technology also said the layoffs affected multiple departments of the company in Beijing and Shanghai.
A source close to the company said the layoffs impacted less than 10% of its workforce and were part of its normal performance review process, adding that affected employees were given a buffer period.
Xiaohongshu did not immediately respond to a request for comment.
Founded in 2013, Xiaohongshu has more than 2,000 employees across several cities in China. Its name translates to “Little Red Book”.
The Shanghai-based company, whose backers include Tencent Holdings, Alibaba Group and Singaporean state investor Temasek Holdings, completed a $500 million fundraising round in November that valued it at as much as $20 billion.
Its job-cutting exercise follows such moves by other Chinese tech giants, including Alibaba and Tencent.
Reuters reported last month, citing sources, that Alibaba and Tencent would together cut tens of thousands of jobs this year in one of their biggest rounds of layoffs as they tried to cope with a sweeping regulatory crackdown.
New regulations have banned some of their old business practices and limited growth opportunities.
Xiaohongshu has also been targeted by Chinese regulators.
In November it was called out by authorities for excessive collection of personal information. In January it was fined 300,000 yuan ($47,000) after state media reported it had failed to stop users from sharing lewd content featuring minors.
(Reporting by Josh Ye; Editing by Brenda Goh and Bradley Perrett)
