Chinese video streaming company iQiyi is poised to impose massive job just on its workforce Chinese and financial sector media reported on Wednesday and Thursday. The layoffs could affect 20-40% of its workforce, the reports said.
Contacted by Variety, iQiyi acknowledged the existence of the media reports, but offered no further response.
On Wednesday the company announced a significant crop of original content at its Singapore-based international platform. On Thursday, in China, it unveiled a VR headset that would increase its presence in the metaverse.
Leading financial news site Yicai Global reported redundancy news that it said was sourced from iQiyi staff. Other Chinese sites reporting the job cuts included Techweb, Sina Technology and Red Star News.
Sina Technology said that the company needs to reduce costs and will focus the job cuts on spending departments such as marketing and delivery. It said that almost all staff in the iQiyi Research Institute and iQiyi Game Center have been laid off. Even the key content department was not untouched.
Yicai said that streaming industry rivals had responded by posting jobs vacant advertisements in the hope of recruiting departing iQiyi staff.
The moves follow the recent publication of poor quarterly results, in which losses deepened and subscriber numbers edged fractionally lower to 103.6 million. ““During the third quarter, we experienced significant uncertainty in terms of content scheduling, which resulted in softer than expected top-line performance,” founder and chief executive Gong Yu said on an earnings conference call.
For the three months from July to September it reported revenues of RMB7.6 billion ($1.2 billion1), representing a 6% increase from the same period in 2020. Net loss attributable to iQIYI was RMB1.7 billion ($268.4 million), compared to net loss attributable to iQIYI of RMB1.2 billion in the same period in 2020. The figures also represented a quarter on quarter increase in revenue, but a deepening of its quarterly losses.
The number of total subscribing members was 103.6 million as of September 30, 2021 (103.0 million excluding individuals with trial memberships), down from 106.2 million (105 million excluding trial subs) at the end of June. And for the fourth quarter, Gong offered a 1% revenue gain as the most optimistic scenario.
But iQiyi’s financial problems are long-standing. It lost around $500 million in 2017, its last year as a private company. Losses increased to $1.3 billion in 2018 the year it did an IPO on the NASDAQ stock exchange. They increased again to $1.5 billion in pre-COVID year 2019. In 2020 losses shaded down to $1.1 billion. In the first nine months of 2021, it had lost a further $638 million.