Sequoia Capital China to Layoff 20 Percent of its Workforce
Sequoia China, the Chinese arm of Sequoia Capital, could possibly layoff as much as 20 percent of its investment professionals due to an industry slowdown leading to investors’ low appetite for risk, reports Reuters on May 6, 2019.
Sequoia’s Impending Firing Spree
Per the report, two sources close to the matter have revealed that Sequoia Capital China intends to layoff at least ten percent of about 70 of its investment workforce due to the slowdown in the financial aspect of the second-largest economy’s tech sector.
Prior to Reuter’s publication, the highly-reputed VC reported that it reviews its workforce regularly which can result in an adjustment of its staffers if deemed necessary.
Sequoia China also stated that it had hired upwards of 13 new investment professionals within the space of 12 months, a move that bloated its workforce. However, a spokeswoman of the VC came out to refute the claims once the story was published.
Reportedly, Sequoia China has been retrenching its staffers since March this year due to the growing economic crisis partly brought about by the trade war between China and the United States.
It’s worth noting that Sequoia China is not the only firm affected by the tension in the economy, as other firms in China have either done the same or cut down the salaries of their workers.
For instance, Didi Chuxing, a ride-hailing firm, in February revealed that it would lay off 15 percent of its staff and mostly those who are are in non-core business units. Bloomberg, in March, also informed that Tencent Holdings Ltd plans to demote over ten percent of its managers.
Sourcing for New Capital
It’s worth noting that it has become difficult for Chinese firms to conduct fundraising campaigns since the government’s move against debt financing and below-par performance by firms that previously conducted initial public offerings (IPOs) have also made investors wary.
In related news, on May 6, 2019, BTCManager informed that First Digital Assets had announced plans to lay off some of its workers and its research arm; a decision that was attributed to the bear market.