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On June 14, Renmin CEO Li Jian released an internal letter saying that Renmin's business model has entered stage 2.0, but the organizational structure is still in stage 1.0.

In order to promote the development of the company to the 2.0 stage, the company structure, departments and teams will be comprehensively combed, merged and reorganized, and the corresponding optimization and adjustment will be carried out, and the employees who have been laid off will be compensated.

The compensation will be paid in nine installments

As soon as the internal information of Renren car was released, the department quickly held a meeting and announced the compensation for layoffs.

According to people familiar with the matter, the proportion of layoffs is 60%, and it has been revealed that only 300 people will be left after the layoffs. Renmin said it would not comment.

In the Renmin policy, front-line employees are awarded 1000 "thank-you options", department Leader awards 2000 shares, chief supervisor level awards 5000 shares, and employees who have been on the job for less than six months are halved. The Thank you option is valid for 12 months.

The compensation will be paid over a period of nine months, which is equivalent to 1x9 per month. Many people have expressed dissatisfaction with this.

And the salary will be paid on June 14, and the social security and provident fund will be paid normally in June, requiring the personnel to "leave on the same day", regardless of whether they agree to close the internal account directly or not.

In the Nation1 compensation scheme implemented by Renren car this time, the base of N is the average pre-tax salary of the previous 12 months, 1 is the basic salary, and the base of N is 3 times of the social average wage if the average wage is more than 3 times the social average wage.

Some related people said that the year-end bonus for Renren car was originally paid for the last time before the Spring Festival, but the notice of shortage was changed to the second quarter of this year. However, it has not yet been released, so it is inevitable to worry about whether the compensation paid over a period of nine months can be completed.

In February this year, it was reported that Renren car local branches had laid off staff, and there were even rumors that Renren car was going bankrupt. In response to this, Renmin official responded that there is no "bankruptcy", "closure", "capital chain break" and so on. At present, all business is operating normally, and the partnership system has been announced. The total number of partners in the country exceeded 4000, according to data released by Renmin in April.

New platform, new retail version 2.0

The reason for this layoff, Renren said, is that Renche's business stage is still in its early stages, but because the organizational structure lags behind business development, the morale of some teams has deviated from the entrepreneurial state. Slow decision-making, inefficient work, overstaffing, loose discipline and other phenomena continue to emerge and have a tendency to spread.

To this end, the company's structure, departments, teams will be comprehensively combed, merged and reorganized, and the corresponding optimization and adjustment will be made, and the employees who have been laid off will be compensated.

Renren upgraded its strategy of "new platform, new retail" at the beginning of this year, and now it has achieved a phased victory: it has thousands of partners in nearly 100 cities across the country; "strict selection of shops" in Beijing, Shanghai, Shenzhen, Chengdu and other places have opened one after another, and the layout of new retail for used cars has been launched in an all-round way, "successfully upgraded to version 2.0 of people's cars".

However, Renren car in the new business model, resulting in inefficiency and redundancy, there will be no new business to expand in a short period of time.

The share price has fallen by 99%.

On the evening of June 14, shares of Renren, which is listed on the New York Stock Exchange, plummeted after it was opened today. It opened at $1.21, then fell off the cliff, falling as much as 33.08% to $87 million.

Since June 22, 2018, Renren's share price has fallen below the $1 mark again.

As of press time, Renren's share price was still less than $1, down more than 25%, and its market capitalization was only more than $67 million, down 99% from $7.482 billion on the day of its listing seven years ago.

On June 12, Renren reported revenue of $110.4 million for the first quarter of fiscal 2019, down 17.6% from a year earlier and a net loss of $27.9 million, compared with a net loss of $41.6 million in the same period last year.

However, the new model of Renmin car needs to spend more time learning to operate, how to improve user education, partner compliance and platform money management capabilities, and Renmin car will meet more challenges and unknown in the future.

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