Liu Qiangdong has not yet turned against his brothers.

Author | Liu Baodan

On the afternoon of December 13th, there were rumors in the market about layoffs at JD.com, involving logistics, technology, retail, and industrial business lines. The severance package was reported to be N+1, with no year-end bonus.

Internal sources at JD.com denied the rumors and stated that there are currently no plans for layoffs at JD.com.

Some JD.com employees also mentioned that in the past, there were more personnel changes in the technology group rather than the retail group. However, currently, there is no personnel optimization in the technology group, and JD.com is actively hiring for various positions.

The rumors of layoffs may be related to recent statements made by Liu Qiangdong.

On the evening of December 9th, Liu Qiangdong responded to employees on the internal network, stating that JD.com will never "lie flat" (meaning to not be complacent or stagnant). He acknowledged that the organization is currently large, bloated, and inefficient, and that change will take time.

His comments were in response to questions raised by employees who believed that JD.com had many issues in terms of promotions and execution. However, many people mistakenly interpreted his comments as a precursor to layoffs.

Employee efficiency is considered an important factor affecting the evolution of the e-commerce landscape. In recent years, the number of JD.com employees has continued to grow. According to the financial report, as of December 31, 2022, JD.com had 450,700 employees, with a three-year growth rate of 43%. From an efficiency perspective, JD.com's per capita revenue last year was 2.3215 million yuan, a decrease of 150,000 yuan compared to the same period in 2021.

JD.com's employee efficiency is relatively low in the industry. According to data from Tonghuashun, as of March 31, 2023, Alibaba had a total of 235,200 employees, with an efficiency of 3.6931 million yuan per employee. As of December 31, 2022, Pinduoduo had 13,000 employees, with an efficiency of 10.0491 million yuan per employee.

In other words, JD.com has a much higher number of employees compared to its peers, but its efficiency is the lowest. This is what Liu Qiangdong referred to as a large, bloated, and inefficient organization. Therefore, many people believe that layoffs may be possible in the future.

However, with JD.com's denial, the storm of layoffs has temporarily subsided.

However, the issue of slowing growth in JD.com's core retail business needs to be addressed. According to the financial report, JD.com achieved revenue of 247.7 billion yuan in the third quarter, a year-on-year increase of 1.7%. The growth rate of the retail business, which accounts for 86% of the revenue, was only 0.06%. In the first nine months, JD.com achieved revenue of 677.7 billion yuan, an increase of only 1% compared to the same period last year.

On November 28th, boosted by its third-quarter performance, Pinduoduo's stock price surged by 18%, reaching a market value of 184.7 billion US dollars, just a step away from Alibaba. That night, many Alibaba employees couldn't sleep, and two days later, Pinduoduo's market value officially surpassed Alibaba's. As early as October 2019, Pinduoduo's total market value of 46.448 billion US dollars had already surpassed JD.com, putting tremendous pressure on Jack Ma and Liu Qiangdong.

On the night of the 28th, Jack Ma expressed his belief in change and improvement within Alibaba on the internal network. Eleven days later, Liu Qiangdong also expressed on the internal network that JD.com's foundation is still strong and he believes that it will emerge from the bottom.

The e-commerce competitive landscape is entering a new stage. If JD.com wants to make a complete comeback, it needs the determination to fight against the odds and innovation in its business model. As Liu Qiangdong said, JD.com must change, otherwise there is no way out.