Show caption The value of Didi shares has plummeted since the ride-sharing company was floated. Photograph: Jade Gao/AFP/Getty Images Technology sector Chinese taxi app Didi shelves plans for major overseas expansion Exclusive: Prominent tech company cuts half its UK employees amid signs of pressure from Beijing government Jasper Jolly @jjpjolly Wed 11 May 2022 16.27 BST Share on Facebook
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Chinese taxi app Didi has told staff it has put plans for major international expansions on hold until at least 2025 and cut half its UK employees amid pressure from Beijing on one of its most prominent tech companies.
Didi Chuxing has been on the back foot since last summer when the Cyberspace Administration of China, a powerful regulator, banned the country’s dominant ride-hailing company from listing its app on mobile app stores in the country.
The ban came only days after the company floated on the New York stock exchange, and sent shockwaves around the Chinese tech sector. The move was widely seen by analysts as an attempt by the ruling Communist party to rein in the country’s tech companies after rapid growth in their market value and power.
Didi, which is backed by Japanese investment house Softbank, in December announced that it would delist its share instruments from New York, and the US Securities and Exchange Commission is investigating the initial public offering, according to the company’s latest annual report. Shares that were worth nearly $80bn (£65bn) when it listed were valued at only $7.6bn on Tuesday evening.
Didi had previously planned to launch in the UK and Europe, with an office in London that would have overseen a direct challenge to other ride-hailing and food delivery companies such as the US’s Uber and Estonia’s Bolt. Uber is also Didi’s second-largest shareholder after pulling out of China in exchange for a 12% stake in its rival.
However, it paused that expansion in August following the Chinese crackdown, and in a February meeting told staff in several markets that it would pause until 2025, according to a person with knowledge of the meeting. Didi last month said it would also pull out of South Africa.
The company had about 40 employees in the UK, several of whom moved from the Latin American markets where Didi retains a strong presence. About half of those staff will remain in London but work on other markets following a consultation. Didi has recently announced expansions to Chile and the Dominican Republic, and also has strong positions in Mexico and Brazil.
There are other signs that Didi may be subject to Chinese government pressure, including a rapid U-turn on a decision to pull out of Russia, an ally of China, as first reported by Nikkei.
On 21 February, three days before Vladimir Putin’s regime invaded Ukraine, Didi announced to staff that it would pull out of Russia by 4 March. The company wrote to drivers informing them of the decision, but within five days – shortly after the invasion began – it had announced it would remain in the country.
A spokesperson for Didi did not comment on the company’s plans beyond highlighting its recent expansions in South America and Egypt.