Rumor: Letao Implements Further Layoffs
Tencent Tech, 12/17/12
Chinese B2C online shoe retailer Letao is still in a painful transition period, according to recently laid-off employees, reducing its Beijing staff to less than 100 after corporate restructuring and then again to 40-odd employees after another round of layoffs last month. Letao's team in Hangzhou, responsible for joint operations with Alibaba Group, has been reduced from nearly 20 to less than 10 employees. Letao's design team is based in Zhuhai, but an exact headcount is currently unavailable.
"Staff cuts are the most direct cost-cutting measure, but also have reduced teams' operational capabilities and hurt morale," said a source close to Letao.
Letao has recently joined the open platforms of TMall, 360Buy, and Amazon.cn, and on its official website now sells only its own-brand products, but no longer offers products from third-party brands. While Letao has not announced sales figures for its official TMall store, Tencent Tech estimates that, based on its product offerings, monthly sales volume does not exceed RMB 1 mln.
Editor's Note: Letao is currently shifting its business model from an online retailer to become a private label brand. For more background on this topic, please see "Rumor: Letao Lays Off Staff, Behind on Wages" MD 3/01/12 issue.
Keywords: corporate restructuring Internet B2C Letao business model e-commerce apparel HR
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