Photo/Shetuwang

Sept. 26 (NBD) -- Sources close to BabyTree Group (01761.HK), a maternity & child-focused community platform, confirmed the large-scale axe of jobs, when reached by National Business Daily (NBD) Wednesday.

A former marketing manager in Beijing at the company told NBD that he completed the resignation procedures last week. "Our whole department was slashed," the manager revealed, "Some voluntarily resigned while some are forced to." The layoff was due to the upheaval in high-level officials, the person added.

Media reports earlier said that BabyTree had initiated a round of job cuts, sacking nearly 30 percent of its staff. But later the company refuted the claim, saying that here was no big layoffs but normal flow of talents.

But another source at BabyTree said, "The large-scale layoff started from this month and the equity structure of BabyTree will also be changed".

With regard to the issue surrounding job cuts, NBD contacted BabyTree but the latter declined to comment.

Rumor also has it that the shareholding and position of BabyTree's CEO Allen Huainan Wang would be changed, which was denied by the company. This was not the first time that the maternity & child service provider was reported to undergo equity changes.

On August 30, 2019, Chinese conglomerate Fosun International (00656.HK) acquired about 29.2 million shares in BabyTree, with its stake increasing from 21.76 percent to 23.48 percent. Moreover, a media report on September 23 unveiled that several executives from Fosun International already took positions in BabyTree. 

The above-mentioned sources didn't respond to this. While Fosun International eyes BabyTree's data and resources in maternity and child products, the latter had handed the back-end e-commerce management over to Alibaba, as per previous cooperation agreements, NBD noticed. 

Despite expanding user base, BabyTree is tangled with continuous loss. Before the company went public on the Hong Kong stock exchange last November, it had remained loss-making for three consecutive years. 

According the interim report of 2019, BabyTree recorded adjusted losses of 98.3 million yuan (13.7 million U.S. dollars). The report also indicated proceeds from advertising made up nearly 88 percent of the company's total revenue for the period. Obviously its robust advertising segment failed to turn the tables.

As of the closing time on Thursday, stock price of BabyTree stood at 2.24 HKD (28.5 cents) per share, down 71 percent from 7.7 HKD per share at its peak in March this year.

Email: gaohan@nbd.com.cn