China's Instagram-like Xiaohongshu joins the tech layoff bloodbath, cutting about 10% of employees

• Chinese lifestyle app Xiaohongshu has laid off 10% of its workforce, a spokesperson confirmed.
• It joins other big Chinese tech firms which have axed, or plan to axe thousands of jobs.

China's equivalent of Instagram, Xiaohongshu, is the latest tech firm to lay off workers as the sector wrestles with Beijing's crackdown.

Xiaohongshu, a lifestyle e-commerce platform whose name means "little red book," is popular with China's Gen Z for its blend of influencers and shopping. The app claims to have around 200 million users, mostly in China.

The app has laid off between 9% to 10% of its workforce, a spokesperson confirmed to Insider Friday.

The workers were dismissed after a performance review in March, the spokesperson said, describing these as "normal HR optimizations."

While the spokesperson declined to say how many employees were let go, the company said on a Chinese job recruitment portal that it has more than 2,000 employees in Shanghai, Beijing, and Wuhan, suggesting cuts may affect hundreds of workers. Insider understands that employees were laid off across the company.

Some Chinese social media users claimed they work at Xiaohongshu and were asked to leave the same day they were dismissed.

"I was dismissed. I thought Xiaohongshu was on the rise. But like a bolt from the blue, I was asked to leave the same day they dismissed me, I didn't even get my year-end performance bonus. I'll delete Xiaohongshu from my phone," a screenshot of a user's comments on Maimai, China's LinkedIn equivalent, shows. Insider couldn't independently verify the post's authenticity.

The firm's spokesperson said: "Affected employees are given a buffer period."

Insider understands that Xiaohongshu would previously give underperforming employees time to turn their performance around before being cut. Amid the pressures of a weaker economy and Beijing's regulatory crackdown on tech, the company appears to have gotten tougher.

Xiaohongshu's axed employees join the masses of tech workers reportedly being let go by China's major tech companies. Last month, Insider reported that at least 400 were laid off at Chinese e-commerce giant JD.com, while Reuters reported that its competitors — Alibaba, and text-messaging and gaming giant Tencent — are cutting tens of thousands of jobs this year.

Chinese social media users have been captivated by the constant flow of news of dismissals and worrying about the impact of mass layoffs.

Insider reported that some companies are trying to maintain a positive tone around the layoffs by describing them as "graduation" and congratulating affected employees.

The rumblings on social media prompted China's cyberspace regulator to say earlier this month that employment in the sector has remained largely stable.

It said that between last July and mid-March, some 216,800 workers left and 295,900 new hires joined the 12 internet companies it spoke to.

The dismissals come amid Beijing's crackdown on the tech sector

Though layoffs at China's tech firms are not uncommon, this round of dismissals is large-scale and coincides with Beijing's crackdown on homegrown tech giants.

In recent years, China has launched antitrust probes against tech companies, increased oversight of data security, and restricted consumers' usage of internet and gaming platforms. At the same time, China's tech firms are struggling to get users and consumers to spend more amid a cooling economy.

That may be prompting these companies to look elsewhere for growth. Insider previously reported that Xiaohongshu was hiring outside of China with the aim of launching internationally. Tencent has been ramping up its investments in gaming studios overseas to make up for losses in China, an analyst told Forbes.

In November, investors including Singapore's Temasek Holdings, Tencent, and Alibaba injected $500 million into Xiaohongshu, bringing its valuation to $20 billion, Reuters reported, citing sources.