The layoffs at Station B are not surprising

The layoffs at Station B are not surprising

At Bilibili's third quarter earnings call on November 29, Chen Rui, chairman and CEO of Bilibili, revealed a piece of news: the organizational structure will be optimized to "cut the fat and increase the lean." This part of the adjustment will be completed this year, and the effect will be seen in the first quarter of next year.

Shortly after the words were spoken, on December 6, news of layoffs at Bilibili was reported, and it became a hot search on Weibo. Wang Luobei, a Weibo workplace celebrity, sorted out the layoffs at Bilibili and said that the main site, comics, live broadcast and other departments of Bilibili were all within the scope of layoffs, and the layoff compensation was N+2 and twice the annual leave.

In response to this, Bilibili told the Economic Observer reporter that there have been some business adjustments recently, and therefore accompanying personnel adjustments, but there have been no large-scale layoffs.

The layoffs at Bilibili are not surprising. At the end of last year, Bilibili proposed the goal of achieving break-even in 2024. During the Q3 earnings call this year, Chen Rui mentioned this goal again and emphasized that reducing losses has become one of the company's most important tasks. Layoffs are often the first choice for most companies to reduce losses and costs.

Facing pressure to reduce losses

On the hot list of workplace social platform Maimai, B station personnel changes ranked fourth. A person who was certified as a B station employee said that he was suddenly interviewed by HR and asked to leave on December 16. He is a relatively young employee of B station and has just passed the probation period. Another person who was also certified as a B station employee added that the employees with relatively short service were the focus of this adjustment.

This is the most popular post under the topic of Maimai Station B. Unlike in the past when the Internet company announced layoffs, the comments section was filled with indignation. This time, most people in the comments section advised that they should take the layoff gift package and leave as soon as possible. There is no right or wrong at this time.

At the beginning of this year, Internet companies started to lay off employees. At that time, layoffs were still a new thing. By the end of the year, Internet companies that had not laid off employees became the few exceptions. However, the layoffs at Bilibili still attracted attention. After all, this is not the first time that Bilibili has laid off employees. In the first half of this year, Bilibili had already carried out a round of layoffs.

"Layoffs at the end of the year usually happen when some businesses can no longer be run," iMedia Consulting CEO Zhang Yi told reporters. B站 has made many attempts at commercialization in the past few years, but some of them have not been effective, so layoffs are inevitable. He believes that reducing losses is a relatively big pressure B站 is currently facing.

According to the third quarter report of Bilibili, the net loss was 1.72 billion yuan, a year-on-year reduction of 36%. However, compared with similar video companies, the loss of Bilibili is still quite significant.

Among long video platforms, iQiyi has been profitable for three consecutive quarters, and Mango TV has been profitable for many years. Short video companies are currently suffering the most losses. Kuaishou's net loss in Q3 was 2.71 billion yuan, a year-on-year reduction of 61%. However, Kuaishou's domestic business has been profitable for two consecutive quarters.

Compared with Kuaishou, Bilibili still has a gap in revenue scale. In the third quarter, Kuaishou's revenue was 23.1 billion yuan, while Bilibili's revenue was 5.79 billion yuan. When the revenue scale is not as good as that of its competitors, the market will put forward higher requirements for Bilibili's profitability.

Improving efficiency is more important than laying off employees

After layoffs in the first half of this year, B Station's performance improved in the third quarter, with revenue increasing by 11% year-on-year and losses decreasing by 36% year-on-year. However, B Station still has shortcomings in commercialization.

Chen Rui himself did not shy away from the current problems. For example, the gaming business, which was once the largest source of revenue for B Station, accounted for only 26% of revenue in Q3. In November this year, B Station made a major adjustment to the gaming team. The previous person in charge left and Chen Rui took over.

"We took some detours in developing our own games. We tried a little bit but never achieved anything," said Chen Rui.

Zhang Yi believes that Bilibili’s monetization strategy has fluctuated in the past few years, leading to the current results.

In the early days, B站’s revenue was mainly from games, and it was questioned as a video company in disguise of games. Later, B站 deliberately reduced its game business, and now it has found that poor game performance has a great impact on revenue.

Chen Rui now defines B Station's games as follows: Video and games are B Station's main business. He said that the so-called main business is the core business of a company.

In November this year, Bilibili refocused on games and made personnel adjustments. The specific effects remain to be seen.

Another business that Bilibili has focused on is vertical short videos. In the previous two earnings conference calls, Chen Rui spent a lot of time talking about the development of this business. According to Chen Rui, Story-Mode (i.e., Bilibili's vertical short video business) has a good effect on activating low-active users and also helps increase the number of followers of low-level UP masters.

Xie Chen, an internet analyst at Zhejiang Business Media, said that he is more optimistic about Bilibili's Story-Mode and believes that Bilibili will see financial improvements.

Two years ago, Bilibili broke through the circle and transformed from a niche community of the second dimension into a mass platform. The number of users expanded from tens of millions to 330 million, but the commercialization ability did not keep up. In 2022, Bilibili focused on reducing losses and achieving the goal of profitability in 2024. Zhang Yi told reporters that referring to the experience of iQiyi, when a video company is determined to make a profit, it can still do it. However, this is not something that can be solved by layoffs alone, but also requires the company to make greater efforts in the field of efficiency improvement.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.

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