Mafengwo is going to lay off 40% of its employees? What happened to the travel giant that raised 5 billion yuan?

In recent times, news about various layoffs or problems of Internet companies has been endless. Recently, the famous travel giant Mafengwo has also been exposed to layoffs. This company has raised as much as 5 billion. What do you think about the layoffs of travel giants?

1. Mafengwo was exposed to lay off 40% of its employees

According to a recent report from Phoenix Finance, many netizens recently broke the news on Maimai that Mafengwo was about to lay off employees, including many certified Mafengwo employees. Breaking the news. According to reports, layoffs will begin on December 12, with a ratio of 40% and a compensation package of N+2. Except for core departments such as search recommendation and content center, the remaining employees will not receive year-end bonuses.

At present, Mafengwo has not responded to this matter. This is not the first time rumors of layoffs have spread in Mafengwo. In April this year, some media quoted internal employee information from Mafengwo, saying that Mafengwo was undergoing layoffs, accounting for 10% of the total number of employees.

According to public media reports, the layoffs in April this year may be related to the internal structural adjustment of Mafengwo. The middle and senior management introduced from the outside and the internal business integration were not successful, leading to a wave of layoffs in April. The layoffs at the end of this year may be related to the fact that Mafengwo's commercialization business is spreading, but the results of exploration are not clear.

According to Qixinbao data, Mafengwo was founded in 2006 and officially began corporate operations in 2010. It has been deeply involved in the field of tourism content for more than ten years and has received multiple rounds of capital support. Mafengwo completed a US$250 million Series E round of financing in May this year, led by Tencent, with participation from General Atlantic Capital Group, Qiming Capital, Yuantai Evergreen Fund, Lianchuang's NM Strategic Focus Fund, and eGarden ventures***. In addition, Mafengwo’s investors also include Hopu Fund, Hillhouse Capital, etc. Qixinbao data shows that Beijing Mafengwo Network Technology Co., Ltd., the operating entity of Mafengwo, was established in November 2007 with a registered capital of 15 million yuan.

With so many well-known companies leading the investment, it can be said that Mafengwo has become a rare and promising giant in China’s tourism and travel market. Not long ago, Mafengwo’s founder Chen Gang announced earlier this year An internal letter once stated: "Mafengwo will continue to attract outstanding talents, expand market investment, and strive to become China's largest tourism traffic platform and achieve IPO listing in the next one to two years."

However, just now Shortly before the announcement of the layoffs, Mafengwo had just released the 2020 "Strategy+" marketing strategy, proposing that it would base its content advantages on the core concept of "Strategy as a Service", deeply cultivate interest communities and circle gameplay, and expand marketing radius and marketing scenarios. Build a closed loop of decision-making that integrates planting and procurement, and create a panoramic marketing map covering content marketing, IP marketing and digital marketing.

So, many people are wondering. On the one hand, Mafengwo seems to be going public and upgrading its strategy. On the other hand, Mafengwo is laying off a large number of employees. What is the logic behind this?

2. What do you think of the hornet’s nest?

Compared with many Internet companies that have experienced problems recently, Mafengwo’s layoffs seem to be a very strange phenomenon. Mafengwo’s official response to this matter is: “The information is incorrect”, Mafengwo is responsible People said, "The company is currently undergoing normal business structure adjustments, and the talent introduction plan is still continuing. This round of business adjustments is based on the macro environment and the company's strategic upgrade, with business focus and organizational efficiency improvement as the core, and a renewed entrepreneurial spirit." So, what should we make of it?

First of all, Mafengwo does not seem to be short of money. We have seen that many Internet companies currently experiencing problems, whether it is Taojiji or Dailuobo, the core is the break in the capital chain. So, is Mafengwo short of money? There seems to be no shortage. From the public market data, we can see that according to Qixinbao data, from 2011 when Mafengwo received a US$5 million Series A financing from Capital Today, to May this year, Tencent led an investment of US$250 million. US dollars, after these rounds of financing, we only need to perform a simple mathematical calculation to find that Mafengwo has raised a total of US$713 million, which is equivalent to RMB 4.977 billion based on the latest exchange rate. With an investment of 5 billion, Mafengwo is not a real money-burning business model. A company like Mafengwo, which started with content marketing, guide services, and interest communities, actually does not burn money in its own business model, and is even asset-light. model, coupled with the fact that Mafengwo’s remuneration for layoffs we have seen is N+2, it at least proves that Mafengwo is not too short of money at the moment, so it is still too early to badmouth Mafengwo at this time.

Secondly, what does Mafengwo want to do with such large-scale layoffs? We have discussed a similar case before. I wonder if you can recall it. This seems to be a strategic strategic transformation, just like Samsung closing its Chinese factory. This does not mean the overall decline of Samsung, but a a process of strategic reorganization.

Referring to Samsung's gameplay, Mafengwo may actually be in a similar situation. We have carefully seen that Mafengwo's layoffs include employees in the two major sectors except search and content. This seems to be the same strategy as Mafengwo's recently announced "Strategy+" strategy. The process coincides with each other. What is strategy+? According to Mafengwo, it is to focus on the advantages of the content industry, attract user experience through its own strategy service, and use community and circle-level social gameplay to promote user development. Then this is This means that Mafengwo needs to cut off some of the industries it has expanded in the past that have nothing to do with its own strategy. If this is the case, then Mafengwo’s large-scale layoffs seem to be explainable.

Third, the underlying purpose of Mafengwo is to go public. For Mafengwo, it has now gone through 6 rounds of financing. From this perspective, Mafengwo has actually gone through most of the Internet venture capital era. During this period, for Mafengwo, whether it is the internal development of the company, Whether it is the requirements of corporate investors, the listing has reached an imminent time, which can also explain the goal of achieving an IPO in the next one to two years, as stated by Chen Gang, the founder of Mafengwo. But to achieve listing, Mafengwo must have a clear profitable business model, which means that the story Mafengwo tells must be different from that of traditional listed companies Ctrip and Tongcheng, and this story is what Mafengwo calls the "strategy" +", to be a content service provider for China's tourism industry, or even to be Toutiao for the tourism industry. Such positioning may help Mafengwo have sufficient influence in the capital market.

Therefore, the current layoffs may be the prelude to Mafengwo’s listing and strategic transformation. However, for any company, this transformation is a pain that needs to be endured. How can it achieve this thrilling transformation? Jumping is not an easy task for Mafengwo. We can only wait and see whether we can do it well.