Mogu Inc., a Tencent-backed fashion e-commerce platform, is laying off more than 30% of its staff, local media reported on Wednesday, citing several users of Chinese recruitment platform Maimai. Layoffs have rocked China’s tech sector over the past month, affecting some of the country’s biggest tech companies including iQiyi and Kuaishou.
The layoff reportedly focuses on Mogu’s tech department, with only around 30 employees supposedly remaining after the company slashed 80% of the jobs within that unit. Some commentors on Maimai said that in the absence of large-scale business to share the cost of technology, the technology department is naturally the first one to be trimmed.
A person familiar with the matter revealed to Jiemian that the overall layoff rate is true, but the layoffs in the technical department are more than half, not reaching 80%.
Founded in 2010, Mogu Inc. was originally known as a female shopping sharing and shopping guide community. As early as 2016, Mogu Inc. invested in the live-streaming sector before it was overtaken by competitors. In 2018, the company was listed on NASDAQ.
In the past few years, Mogu Inc. has relied heavily on live-streaming commerce. Since 2016, the company has planned to transform the e-commerce supply chain by way of live-streaming to deal with various problems. According to the company’s financial report, in the first quarter of fiscal year 2022, the GMV of the live-streaming business accounted for 90% of total GMV of the platform. As of June 2021, the live-streaming GMV in the past 12 months reached 11.213 billion yuan ($1.8 billion), up 27% year-on-year.
However, relying on live-streaming failed to save the decline in overall performance. According to the financial report of the first quarter of fiscal year 2022, its GMV was 2.864 billion yuan, down 8.2% year-on-year. Total revenue was 92 million yuan, down 30.6% year-on-year. The net losses attributable to ordinary shareholders was 95.5 million yuan, compared with 88.9 million yuan in the same period last year.