An exec at a $4.4 billion tech company fired a woman then put her on blast in a team-wide memo: Inside the nightmarish culture of a fast-growing Chinese beauty app

• Meitu is a hot Chinese selfie app maker with hundreds of millions of users - but some believe its global expansion has been plagued by dysfunction.
• Business Insider spoke to more than a dozen former employees, and from some heard allegations of sexism, wild stories of shamings and scathing criticisms in front of other employees, and a tales of a brutal workplace culture.
• Meitu's struggles highlight the challenges in running a global company, and show there's far more to running a tech business than just having a successful app.
• In a statement, the company said that its "cultural values encompass integrity, responsibility, ambition and empathy."
• "Meitu is a shitshow," one former employee said. "I'm embarrassed that Meitu is now on my resumé."

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In November 2017, about an hour after employees on Meitu's international team read a cheery farewell message from one of their colleagues in a company chatroom, they received an eye-popping follow-up note from the company's head of global operations.

The manager, Fox Lui, wanted everyone to know that the employee was leaving because he had fired her, and he blasted her for poor execution, not embracing the company's "user-first" values and various other purported faults.

What's more, he insisted in the chatroom, he was not a "fucking monster" for firing her.

"Maybe my way of handling this is not the best, but I hope you all understand that in order for us to succeed we have to embrace the Company's value," he wrote. "This is even more important than ability and capability."

For Meitu's shell-shocked US employees, this bizarre episode was just another day in the office at what might be one of the most dysfunctional workplaces in Silicon Valley.

Famous over-the-top perks like on-campus massages, ice cream shops and volleyball courts, have earned the American tech industry the reputation for being a worker's paradise -a place where hard work and progressive management combine to form a happy lifestyle. But in the case of Meitu, a Chinese company which has built a $4.4 billion empire by churning out a series of popular selfie-editing apps, the glitzy perks of a Silicon Valley dream job covered up a much harsher reality. 

Business Insider spoke to more than a dozen former Meitu employees involved in the company's overseas expansion. Their tales paint a picture of an almost dystopian version of a Silicon Valley tech gig, including claims of seemingly arbitrary firings, public shamings, and even some behavior some may consider overtly sexist or racist.

The Chinese company's lofty ambitions to take on global internet superpowers like Facebook, Snapchat and Twitter sparked a frenetic and chaotic expansion into the US and the rest of the world. But the expansion exposed deep cultural rifts that wreaked havoc in the workplace and in Meitu's products, and serve as a reminder that there's more to operating a global business than having a popular app.

One former employee estimated that more than 80% of employees on the global expansion team were fired or quit in a little over a year. Many left after just two or three months. "Every day felt like it was your last day there," one person recalled. (Sources requested anonymity in order to discuss their experiences at the company.)

In a lengthy statement provided by Lui on behalf of Meitu, the company said it would not comment on "some personal views from your sources, as it may not reflect the full picture of our company's culture and values," and noted that it was bound by confidentiality agreements with employees and partners. 

With respect to Lui's 2017 comments about the departing employee, the statement reads: " On certain occasions, Fox informed the team of the reasons why the company had to let go of some people and encouraged the team to be more outspoken with the aim of creating a more transparent working environment. In Fox's opinion, this is in line with the company's cultural values."

But those company values did not translate well in overseas offices like those in the US.

"Meitu is a shitshow," one former employee said bluntly. "I'm embarrassed that Meitu is now on my resume … I regret that I spent a year there."

Bringing the craze to America

Meitu's US adventure began in classic startup-style, with staff working out of an apartment - usually around the dinner table - in Los Angeles's Venice neighborhood in 2015. Other US offices would later open in Palo Alto and Santa Clara, in the heart of Silicon Valley, fleshing out a constellation of other international teams in places like London, Mexico, Sao Paulo, and Mumbai.

The goal was to get a feel for local tastes and customs, and then replicate the phenomenal success that Meitu's "selfie" apps have experienced in China, according to the sources who worked in Meitu's US and other overseas offices that Business Insider spoke to. 

Meitu's suite of smartphone apps, which include makeup-simulating apps such as MakeupPlus and BeautyCam, let users share and modify photos and videos. By some estimates, as many as half of the selfies shared on social media in China have been edited with Meitu. The company even sells its own-brand of smartphones that come with its software baked in.

The Meitu and BeautyCam apps "have been in the top five in China market for at least the past five years," said Alex Ng, an analyst at CMB International. "They have a very ... dominant position in this market. A very solid user base focusing on the female user." 

Meitu's apps have gotten some buzz in the US too, with celebrity users like comedian Jimmy Fallon. 

Meitu went public at the start of 2017 in what was Hong Kong's biggest tech IPO in a decade, closing the day with a $4.8 billion valuation. It still has yet to turn a profit.

Meitu's overseas offices, such as the US outposts, were primarily focused on marketing, data analytics, localization, and local partnerships, with the core app development team at its headquarters in Xiamen, China.

Many former Meitu employees spoke positively about the perks of the job. The pay was good, often well above market rates, and employees enjoyed a significant amount of freedom. Some spoke positively about the lessons they learned and the friends they made while working there.

"People went into Meitu, myself included, with some really big, big expectations," one source who spoke favorably of their time at the company said. "We would be able to ... affect change, we would be able to shape and potentially succeed at growing a Chinese company here in the US ."

"Everyone dreaded going to work"

But efforts to parlay its success into the US have not gone smoothly, marked by ever-shifting strategies, directives and a series of management changes.

Focus would switch from app to app, and goals and targets would change without notice; a partnership might be discussed, then rejected; staffers would be demoted and teams abruptly rearranged.

Employees in the US offices were often young and inexperienced. The first person to lead Meitu's American operations was a recent college graduate whose previous job was working as an intern at headphone company Beats by Dr. Dre, according to his LinkedIn profile.

Overseas employees felt expected to stay on top of hundreds of messages on WeChat, the popular Chinese mobile chat app, and work long hours to communicate with China. Sources said that if you weren't seen as active on the app, you weren't viewed as doing your job well. "I still have nightmares about WeChat," one said. 

WeChat also served as a virtual tribunal where some employees felt publicly judged by their peers throughout the organization. Employees perceived to have done a poor job on a task would be mercilessly flogged in WeChat by their managers, with threats of firings thrown in for good measure, sources said.

At the beginning of 2016, Frank Fu, a US-based technology executive who previously worked at Chinese software firm Kingsoft, came on board as the company's new director of global operations. The culture was "hostile," a source recalled of the Fu regime. "Everyone dreaded going to work." Another described management as "authoritative."

Fu would hold intensive "war room" meetings, they said, going round the team and grilling employees on what they were working on, laying into them if their response was perceived as inadequate. People sometimes broke down in tears. 

Some former employees, however, said that Fu was under unrealistic expectations from China: "He was under immense pressure to move mountains," one said, describing him as a "really savvy businessman."

In August 2017, Fu was replaced as the head of the global team by Fox Lui, a Meitu director. Some viewed Fox Lui more positively, describing him as "charming," though others were still critical. Lui enacted a rule whereby employees who spoke out against their colleagues would be fired, one person noted.

If employees complained, they said, Lui would question whether they were being sufficiently "loyal" to Meitu. Problems under Fu's leadership, including employee infighting and shifting priorities, continued under his successor, and the size of the overseas team around the world shrank to less than half its size at its peak of more than 100 employees.

In one notable incident, Meitu laid off a group of employees without notice days before Christmas of 2017, sources said. Lui declined to provide specific numbers on the overseas team, citing Hong Kong listing rules, but said that the staff turnover in on the US team was not significantly higher than the average of Meitu.

"In fast-growing tech companies like Meitu, it is not uncommon to see new people joining our team, while we had to let go of some employees as their skill-sets and expertise no longer meet with the growing needs of Meitu," the company said in its statement.

'Everyone has his or her own perspective'

Some former employees said they witnessed sexist behaviour at Meitu.

One ex-employee said she overheard employees discussing her weight and height in Chinese, not realising that she spoke the language. Another claimed to have heard a Meitu executive commenting on the size of a female employee's breasts to that employee. A third acknowledged that he himself had been accused of sexism while at the company, but believed the allegation was baseless and came about as a result of employees' other grievances.

And multiple sources said Meitu had a pattern of hiring attractive young women. 

Two sources said they felt there were different expectations for men and women's behaviour, with women expected to be "docile" while men "had freedom to act aggressively." Others disputed that men and women were treated differently, though they were still critical of the company. "I don't think [Frank Fu] treated women or men particularly well," one said.

Business Insider reached out to Frank Fu with an initial message outlining some of the concerns of former employees, including sexism allegations. In an early back-and-forth of messages, he acknowledged startup life could be "chaotic." "You would certainly hear negative comments, and there are also a lot positive things to write about," he said. "The question is what is the truth. After all, we must respect people's opinion. Everyone has his or her own perspective."

In subsequent messages, he suggested that former employees might fabricate stories, and declined to take part in an interview, referring Business Insider to Meitu's PR team. He was then provided with a detailed list of questions, including specific allegations, to which he again responded by referring Business Insider to the company PR team.

Lui and Meitu said in a lengthy statement in response that the company's "cultural values encompass integrity, responsibility, ambition and empathy." The company said that "each job seeker enjoys equal opportunity to compete with his or her peers."

After being presented with the allegations outlined above, Meitu expressed an interest in following up. They asked for more information so it could investigate "to ensure that policies are in place and necessary corrections are taken if any such inappropriate conduct did in fact occur." (Business Insider could not share further details without risking revealing sources' identies.)

Problematic selfie filters

The cultural disconnect that strained management also became product and public relations problems.

In 2017, Meitu tested a new filter for one of its apps that transformed the user into a stereotypical native American, with a painted face and a headdress with a feather. One source described it as "racist," and said it was paired with stereotypical music from India (the Asian nation, not native American culture).

After concerns were raised internally, Meitu agreed not to launch it in the US - but it still rolled out in other markets around the world, the source said. "There were a lot of filters that would be considered cultural appropriation and 'inappropriate' in the States," said another.

Multiple former employees say the global team battled with the Chinese team for years over cultural issues relating to its apps.

The Chinese team was responsible for core app development, and the global team found it difficult to make them make any significant changes to localize the apps, multiple sources said - even running focus groups to try and gather data to get their point across. The attitude seemed to be that Meitu was a huge success in China, so it should be able to replicate that success abroad.

There was little recognition of the radically different standards of female beauty around the world, some sources said: The ethereal, slim-faced, pointed-chin look that played well in China didn't necessarily appeal in Brazil or Ireland.  Similarly, one source said, it was difficult to get the Chinese team to sign off on marketing materials or influencer partnerships with people of colour, or plus-size models.

Meitu's Lui told Business Insider that the company was constantly at work improving its product development "feedback loop," and that it works with "influencers" of various age, gender and religions in countries around the world. 

The issue exploded in early 2017, when Meitu went viral in the US and was subsequently accused of being racist, lightening the skintones of people of color. Ex-employees said they didn't believe Meitu wasn't being deliberately racist; the company just hadn't listened to the concerns that Western employees had raised before the crisis erupted.

One potential PR disaster that was averted involved a promotion for a Chinese action movie that featured a face filter to make users look beaten-up, like the film's female character. 

The filter performed well in China, and in 2017, two sources told Business Insider that Frank Fu proposed launching it in Western markets. The problem was that without the context of the Chinese film, the filter arguably would have just made the app's predominantly female users look like victims of domestic violence.

The global team managed to convince management to reconsider, the two former employees said. One added: "We all unanimously shut this down." 

The next big thing

Whether Meitu manages to become a cultural phenomenon in the US to the same degree it has in China remains to be seen. 

Throughout 2017, Meitu's total monthly active users shrunk slightly - from 450 million monthly active users at the end of 2016 to 415 million a year later, according to its annual report. But its overseas monthly users grew just under 30%, from 86 million to a little under 112 million - suggesting that all the its internal turmoil hasn't necessarily halted its growth.

Some former employees view Meitu's stumbles as illustrative of the difficulties in transplanting a business across cultural borders.

One source described Fu as using "a very traditional Chinese business approach … a rather harsh competitive siloing type of business strategy. You're supposed to try and pull resources from other teams, maybe ally with someone, throw them under the bus the next day. It's a highly competitive team culture."

It's not that there's anything wrong with that approach, per se, they said - it just doesn't translate well into the Western business world.

Meanwhile, Meitu investor and company chairman Cai Wensheng is eyeing up another potential venture: Bitcoin. Throughout 2017, the angel investor bought up the digital currency, and now says he holds 10,000 bitcoin - worth more than $95 million at current prices.

"Investing in blockchain is like the way people invested in internet in 2000," he has been quoted as saying. "Many startups come up but along the way some fall. But if you invest in the right startup there will be rewards at the end."

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