(Yicai Global) Feb. 9 -- Heytea has dismissed a rumor that the Chinese milk tea chain plans to lay off as much as 30 percent of its employees.

The Shenzhen-based company said the rumor was untrue, according to a report by Sina Finance. In 2020, Heytea had 695 stores in 61 cities around the world with more than 15,000 employees.

According to an online rumor that claims to cite a source at the Starbucks challenger, Heytea began big staff reductions in a number of departments, including information security and store expansion, before the Chinese Lunar New Year holiday.

Heytea has not performed well in recent years, earning low profits on high revenues, Sina Finance noted. Industry insiders close to its senior management said the layoffs may be in preparation for a financial report before an initial public offering.

Founded in 2012, Heytea completed a USD500 million Series D funding round last July, reaching a valuation of CNY60 billion (USD9.4 billion), almost six times that of Hong Kong-listed rival Nayuki Holdings.

But its average revenue per store and turnover per 3.3 square meters across China began declining in July 2021, and sank as much as 35 percent and 32 percent, respectively, in October from a year earlier, according to figures from management consultancy Meritco Services.

Editor: Futura Costaglione