(Yicai Global) Feb. 22 -- The planned redundancies at Didi Chuxing center on the Chinese ride-hailing giant's R-Lab, its division responsible for nurturing innovation, Yicai Global has learned.
Most of the company's food delivery staff will be laid off because the platform's Beijing-based operator Xiaoju Technology will close the domestic unit while transferring the overseas business to its international team, according to staff who've signed the resignation agreement.
Apart from that arm, other intra-incubation businesses affiliated to the R-Lab, or Rebuild Lab, such as hotels, travel and ticketing, will also probably close, according to sources close to Didi.
Didi Chuxing is preparing for the post-winter period, Chief Executive Cheng Wei said at a monthly internal meeting on Feb. 15. It will 'shut down and transfer' non-core businesses, as well as lay off staff with overlapping positions and those who have performed poorly, accounting for 15 percent of the company's total staff and involving 2,000 people.
Set up in 2017, R-Lab emerged along with the debut of Didi's food delivery business, a seemingly mysterious department inside the company. R-Lab's remit was to explore the company's boundaries and hatch innovative products. It incubated the carpooling app Xiaoba, as well as the food delivery, hotel and travel, ticketing and other new businesses. The fate of these other divisions is not promising, either.
R-Lab started Xiaoba before the food delivery business. According to Didi, Xiaoba mainly promotes short-distance carpooling, positioning to cover the last three kilometers of a commute beyond the reach of a subway station. It only operates in some cities like Beijing and Chengdu. Unlike Didi's express and private car businesses, Xiaoba requires drivers and passengers to meet at sites designated by the platform.
The privately held company has since removed Xiaoba from the range of businesses shown on its app's homepage.
R-Lab, meanwhile, was reportedly exploring the hotel business and recruiting staff last year. In fact, Didi announced last July that it would partner with US online travel giant Booking Holdings, allowing itself an assured tie-up to develop its hotel and travel business with a USD500-million investment.
According to their cooperation plan, Booking's app would provide users with interface of Didi's car-hailing services, and Didi passengers could also book hotels on Booking.com or Agoda directly through the Didi app.