Ofo to Lay Off 70% of U.S. Workforce and Shut Down Operations in Multiple U.S. Cities
The Chinese bike-sharing startup ofo confirmed with Quartz that the company is laying off employees in its North American marketing, communications, and engineering teams, along with its recent withdrawal from other markets.
About 70 percent of the 100 U.S. staff were laid off, according to Forbes. In addition to the chunk of layoffs, the company will also shut down its operations in several U.S. cities, but it is still unclear which cities will be affected.
Seattle is the first city that ofo entered in the United States. Up till June this year, the company has started operations in about 30 regions in the country, releasing around 40,000 bicycles into the market. It had intended to expand to 100 cities by the end of this year.
Some of the retreats are due to restrictive regulations. According to a statement on its website on July 9, ofo has pulled its bikes out of Chicago as a result of the updated permit terms released in late June, which constrains some companies from providing certain services in the test-run area in the city.
Insiders say that even a few months before the operational shrinkage, at least three high-level executives, with the director of North American operations among them, resigned from post.
This move follows ofo’s massive retreats from other overseas markets, such as Germany and Australia, earlier this month. Ofo had been in Berlin for only three months before withdrawing from fierce competition with local bike-sharing platforms, Nextbike and DB Connect. As for Australia, Australians usually drive instead of bike to commute between home and work due to Australia’s vast territory but sparse population.
Ofo has promised to act responsibly with their departures. The greater lesson here is perhaps the understanding that bike-sharing will only be successful if it is compatible with local customs and lifestyles.