58.com encountered performance decline after delisting and implemented layoffs to cope with challenges

According to China Business News on May 18, in order to cut costs and improve efficiency, 58.com is implementing a large-scale layoff plan. According to multiple users on the social platform Maimai who are certified as employees of 58 Tongcheng, the company's layoff ratio is as high as 30%-50%, and it adopts an "N 1" compensation model. The layoffs were not classified according to employees' seniority, and some older employees were also laid off. It is expected that in the second half of this month, multiple departments of 58.com will start layoffs, including the 58.com TEG department and the 58 Ganji Group. The layoff ratio for both departments is 30%. It is estimated that 58.com currently has about 30,000 employees. If the layoff ratio is 30%, it is expected to affect nearly 10,000 people.

Official information shows that 58.com was founded in December 2005 and is headquartered in Beijing. It has 27 direct sales branches across the country. As a comprehensive life service platform, 58.com’s business scope covers many fields such as recruitment, real estate, cars, second-hand goods, local life services and finance.

According to ITBEAR Technology Information, 58.com was listed on the New York Stock Exchange in October 2013. Within 18 months after listing, the company made investments and acquisitions in 14 companies, including Anjuke and China Talent Network in 2015, and merged with Ganji.com in November of the same year. According to market data from Sutu Research Institute, 58.com’s market share at that time was approximately 47.5%, while Ganji’s market share was 34.1%. After merging with Ganji.com, 58.com’s market share exceeded 80%.

In September 2020, 58.com announced the completion of its privatization merger and acquisition and officially delisted from the New York Stock Exchange. Before privatization, 58.com’s revenue growth had declined for five consecutive years. From 2015 to 2019, the revenue growth rates of 58.com were 185.11%, 69.54%, 32.62%, 30.48% and 18.56% respectively. On the last trading day before delisting, 58.com’s market capitalization did not exceed US$8.5 billion, a US$5 billion drop from its peak.

After delisting, 58.com spun off the real estate agency platform Anjuke, the local lifestyle platform Swan Daojia, and the intracity freight platform Kuaigou Dache, and listed them separately. In April last year, Anjuke submitted an application for listing on the Hong Kong Stock Exchange, but after the prospectus expired in October of the same year, the company did not submit a new prospectus.

The company has not yet announced a specific explanation for the reasons for the large-scale layoffs in 58.com. Layoffs may be a common practice adopted by companies to adapt to market changes and improve competitiveness. Being laid off is a huge challenge for affected employees, who must face the risk of losing their jobs and struggle to find new employment opportunities. It is necessary to further observe and analyze the impact of this layoff on the future of 58.com’s business and employees.

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