iQiyi Lays off Employees to Reduce Costs
Chinese video platform iQiyi had begun laying off employees today which, according to some who had been laid off, is the largest round of layoffs in the company’s history to date, Sina Tech reported on Wednesday. iQiyi has not issued a statement on the current round of layoffs.
This round of layoffs is not yet over and many will still be let go or fired before and after the Spring Festival. According to news from several sources, the layoffs are to increase profitability in order to focus on content and technology, refine cost management and flatten the company’s overall structure. As a result, many middle level (director level) employees are being laid off. In addition, some senior employees and older employees with higher salaries have also been laid off.
Another reason is the shrinking budget of iQiyi. Expense-oriented departments, such as marketing, delivery, and channel cooperation, are seeing a higher proportion of layoffs, from 30% to 50%. Almost all the staff of iQiyi Research Institute and iQiyi Game Center have been laid off. Further, as short video products will be merged with other products, only 40% of the staff will stay. Independently-run iQiyi Smart also has a layoff ratio, but it is relatively low compared with the spending departments.
The financial report of the third quarter of 2021 shows that iQiyi’s total quarterly revenue reached 7.6 billion yuan, an increase of 6% year-on-year, with net profit attributable to the parent company of 1.7 billion yuan. Compared with a loss of 1.2 billion yuan in the same period last year, revenue expanded 41.6% year-on-year, and a loss of 6 billion yuani in 2020.
Gong Yu, CEO of iQiyi, once said that the biggest problem encountered by the long-form video industry at present is the serious shortage of content supply. Because of the epidemic, the proportion of traditional TV dramas has decreased and is only one-third of previous years. New online dramas have been delayed due to audit reasons, though those figures don’t take into account the wuality of online dramas.