iQiyi said to lay off hundreds of employees amid losses, share price pressure

CHINESE video streaming platform iQiyi is laying off an average of 20 per cent of its staff across departments amid deep losses, according to a recent report by news outlet Caixin.

Cuts at the least profitable divisions are as high as 40 per cent, the report said, citing company employees. iQiyi is said to have a headcount of over 7,700 people as at end-2020, and is now reportedly aiming to cut wage expenses by a fifth. The layoffs were also earlier reported by another Chinese media outlet Yicai.

The Business Times has reached out to iQiyi on the impact on its Singapore operations. The company last year took up close to 8,000 square feet of office space at 71 Robinson Road.

iQiyi had then revealed plans to hire 200 staff in Singapore over the next few years, in roles including content, marketing, sales and business development. Social media site LinkedIn lists about 30 employees in Singapore.

iQiyi's retrenchments come as it is said to be gearing up for a secondary listing in Hong Kong that could raise at least US$500 million. The company, which is backed by Internet giant Baidu, has picked advisers from banks including the Bank of America, CLSA and Goldman Sachs, Bloomberg reported in October.

However, iQiyi has also seen its share price plunge 74.7 per cent on the Nasdaq this year, amid losses and investor wariness on Chinese tech stocks. For the third quarter ended September, iQiyi posted a net loss of 1.7 billion yuan (S$364.7 million), deeper than the 1.2 billion yuan loss a year earlier.

In a Nov 17 report, Citi analyst Alicia Yap said that the dismal outlook is expected to remain for a few quarters, especially with the chance of another politically sensitive year ahead. Visibility on the content release schedule and ad spend sentiment will likely remain low. She has a neutral call on the stock with an US$8.80 target price.

Shares of iQiyi closed at US$4.97 on Thursday (Dec 9), down 9 per cent.