Beijing Government Says’s Staff Dismissals Are Illegal

By Editor
May 30, 2011

Earlier this month, Chinese online video website announced it was downsizing staff by up to 20%. But now local media reports state those layoffs are not legal.

In accordance with the related items in the Chinese Labor Law and Labor Contract Law, the Bureau of Human Resources and Social Security of Beijing’s Haidian District has reportedly announced that’s previous employee layoffs are illegal and invalid, and the bureau ordered the Chinese video website to make rectifications before May 30, 2011.

Prior to this, said it would cut about 20% of its staff in a company restructuring, and all those employees are sales department staff. The company planned to complete the restructuring within two weeks.

According to a report in, said it has already received the notice from the bureau and will check and improve the layoff procedure. However, the company said it will not change the original layoff plan and the decided compensation plan. If necessary, the company will apply for administrative reconsideration or take legal action to protect its enterprise interests.

An insider from revealed that most of the employees involved in the layoff are currently “on holiday” and did not publish further explanation. Some employees who are responsible for important advertising clients may return to their positions.

While suffered the personnel turbulence, its major competitors in the Chinese video market are busy expanding. recently announced plans of financing USD593 million by issuing additional shares; Phoenix New Media, which just was listed in the U.S., announced its new video media strategy; is making final preparations for its IPO after a marital spat delayed the fulfillment of its bankers’ dreams; and Tencent invested in Huayi Brothers to expand its video industry resources.

According to’s financial results for the first quarter of 2011, the company’s total operating revenue was USD6.6 million, a year-on-year increase of 178.5%; while it made net losses of USD10.9 million.

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