JD.com, China’s number two ecommerce company, made headlines last year in September, when founding CEO Richard Liu (刘强东 Liú Qiángdōng) was arrested on suspicion of rape in Minneapolis.
- The alleged assault happened after a party with associates from a University of Minnesota executive education program. Liu was released without being charged and went back to China. Minneapolis prosecutors announced that they would not file charges in December. JD’s stock began to recover, but it may be due for another battering from investors.
- “Chinese online retail giant JD.com is working on a substantial round of layoffs,” reports The Information (paywall). “In total, JD.com could cut up to 8 percent of its 150,000-plus workforce, or more than 12,000 jobs, according to investors in the Nasdaq-listed company.”
- JD had a rough final quarter of 2018, with its losses widening to 4.8 billion yuan ($715 million) from 900 million yuan a year earlier, while revenue rose 22 percent.
- China’s economic slowdown is affecting many companies, and JD is not alone in the tech industry. The firm behind WeChat, internet behemoth Tencent, “has placed about 10% of its managers on notice for layoffs or demotions,” while ride-hailing company Didi Chuxing slashed 15 percent of its total workforce in February.
- JD offered no comment to The Information, but state-owned nationalist rag Global Times today tweeted: “Just in: Chinese e-commerce giant JD denies reports about it laying off 8 percent of its staff, claiming employee reshuffling was a normal move, which has been exaggerated.”
There’s no question that the business environment for internet firms, and everyone else, has got much tougher in China over the last year. But one has to wonder whether problems ignored during the upstart JD’s meteoric rise are now becoming impossible to hide from the company’s bottom line.