Chinese Q&A Platform Zhihu Begins Layoffs

Zhihu, a Quora-like leading Chinese Q&A platform, was reported on December 20 to be undergoing a personnel adjustment, with the affected proportion reaching 10%. Regarding the news, Zhihu responded to Chinese media outlets, saying that the situation is a normal organizational upgrade.

Since the beginning of this year, Zhihu has been reported to have been conducting many rounds of layoffs. In February, the Chinese internet company was reported to have made a round of layoffs in its video business. According to an internal email in February, the company announced an organizational restructuring. Later in May, another round of layoffs started, with a proportion of 20%-30%, involving many businesses such as technology, commercialization, education and user community.

The latest quarterly performance report released by Zhihu shows that its commercialization is not smooth. This content community is still trapped in the dilemma of increasing income without increasing profits. In the past, the company’s ad business revenue, which once accounted for 86% of its total revenue, fell sharply. Memberships became a new business pillar in Zhihu, contributing nearly 40% of total revenue.

SEE ALSO: Zhihu CEO: Average Monthly Paid Members in July Broke 10M

In the third quarter, Zhihu achieved revenue of 912 million yuan ($130.9 million), a year-on-year increase of 10.7%. While revenue increased, losses continued. During the reporting period, Zhihu‘s net loss was about 298 million yuan, up 10% year-on-year.

The income from paid members has become an important pillar of Zhihu‘s total income. According to the financial report, this part is 335 million yuan, accounting for 36.7% of the total income, an increase of 88.1% compared with 178 million yuan in the same period of 2021. At present, there are 97 million monthly active users in Zhihu, with an average monthly paid members of 10.9 million, an increase of 99.5% year-on-year.

Ad revenue followed closely, with 197 million yuan, compared with 321 million yuan in the same period last year, a sharp decrease of nearly 40% year-on-year, accounting for 21.6% of the total revenue. The company explained that this change is mainly due to macroeconomic conditions and the pandemic situation. Revenue from commercial content solutions also decreased from 278 million yuan in the same period last year to 265 million yuan in this quarter.

Zhihu‘s exploration in the field of vocational education has also attracted a lot of attention, which is regarded by the industry as the second curve to promote revenue growth. In the third quarter, the income from its vocational education business increased from 14 million yuan in the same period of 2021 to 78 million yuan, an increase of 457%, accounting for 8.6% of the total income. Compared with 46.2 million yuan in the second quarter, during the reporting period, the income from vocational education business increased by 68.8% month-on-month.