Rumors of 20% staff layoffs at Chinese ride-hailing giant Didi Chuxing have been gradually verified, and the cuts will also impact the firm’s international business unit, according to domestic media iFeng on Thursday.
Many Didi employees have broken news that the international business unit started layoffs in March, and the production and research team in the Chinese market has seen staff cuts. Meanwhile, Didi’s overseas market will continue to shrink. Some revealed that Jared Huang, Senior Product Director of Didi’s international business unit, has left the post.
In addition, Didi’s international business canceled services in South Africa on March 8. It had previously started trial operations in the country’s top port city of Gqeberha on March 1, 2021. According to various media reports, the firm’s abandonment of this market was due to fierce market competition, repeated pandemic outbreaks and other factors.
The competition in overseas markets is no less fierce than that in the Chinese market. Didi has invested more than $10 million to establish its South African business, a large part of which is used to cover the costs of providing promotions and subsidies for drivers and passengers.
Didi’s commission rate in South Africa is also far lower than the upper limit of 30% in the Chinese market. Melithemba Mnguni, the secretary general of the E-Hailing Operators Interim Committee of South Africa, revealed that Uber’s commission rate in South Africa is 25%, Bolt’s rate is 23%, while Didi’s commission rate is only 13% – almost half of Uber and Bolt’s.
However, high subsidies and low commission rates did not bring about an increase in Didi’s local market share, but they did cause the firm to lose money. This also partially verified Didi’s losses in the second and third quarterly reports of 2021, which showed that its international business lost 1.2 billion yuan ($188.5 million) in Q2 and 1.8 billion yuan in Q3.
Up to now, Didi provides services in 16 foreign countries, including Australia, New Zealand, Japan and others mostly in Africa and Latin America.