Chinese Real Estate Firm KE Holdings Denies New Round of Layoffs

Sina Finance reported on Wednesday that after a wave of personnel changes in October last year, Chinese real estate platform for housing transactions and services KE Holdings (Beike) has conducted another round of staff adjustments this month, mainly involving second-hand and new house transaction service groups.

According to Beike’s insiders, some supervisors were notified that they needed to cut 10% of their employees. In addition, since October of last year, more than 20 middle-level and senior-level employees have left one after another, including a vice president of finance, two general managers and other senior directors.

KE Holdings responded on Wednesday that the company has no plan to adjust their overall staff levels for the time being. Given current epidemic prevention and control measures, the firm’s branches across the country have needed to make dynamic organizational adjustments based on market conditions. Any changes in staffing have been done as a part of their own business development and have not been given any ratio or quantity requirements.

At the same time, the company is providing opportunities for internal job transfers to employees in the leasing, home decoration and home furnishing departments. As for the leave of middle and senior executives, the company explained that it had made adjustments to the financial sector in the second half of 2021 according to changes within the industry in general.

Last October, news of layoffs at Beike Shanghai swirled. At that time, the company responded, “Since 2021, the industry environment has changed significantly, and the company has adjusted some businesses such as finance section in Shanghai. It will provide internal transfer opportunities for employees on a priority basis in accordance with relevant laws and regulations.”

However, insiders revealed that the main group targeted by the job cuts in the last round was mainly first-line real estate agents, with more than 30,000 layoffs and about 2,000 layoffs within platform functional departments.

On March 10 this year, Peng Yongdong, Chairman and CEO of KE Holdings, admitted in an earnings call that 2021 was a year full of challenges and historic difficulties. The net loss in 2021 was 525 million yuan ($82.45 million). Although the adjusted net profit was positive at 2.294 billion yuan ($360.26 million), it decreased by nearly 60% compared with 2020.

The number of Beike stores has grown to more than 50,000 by the end of 2021, a year-on-year increase of nearly 9%. However, the number of brokers was 450,000, an annual decline of nearly 8%.

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According to data for the fourth quarter of 2021, revenue from new and second-hand housing transaction services accounted for more than 97%, while revenue from emerging services, including home decoration and house leasing, was only 500 million yuan ($78.52 million), which has yet to become the next growth engine of the company.