Inner bucket? Cut throat? Efficiency? Revealing the Insider of Jingdong Personnel Shock

 Inner bucket? Cut throat? Efficiency? Revealing the Insider of Jingdong Personnel Shock

ABSTRACT: After 60 days of pain, the shock in Jingdong continues. What is the signal behind the intensive personnel adjustment? What happened inside Jingdong? Can the adjustment bring about a rebirth in Jingdong?

Author | Editor Dong Jie | Shuhong

To ask which company in China has the lowest happiness index at this stage, I think it must be Jingdong. At a recent internal meeting, a senior executive in Jingdong cried out, saying, In my 20-year career, Ive never experienced such a big adjustment and change. Ive been sleepless these days.

A few days after the speech, the senior executive was transferred from his original position and became another cannon fodder for the current round of personnel changes in Jingdong.

Back two months ago, at the groups annual meeting in mid-February, Jingdong declared frankly that in 2019, 10% of senior executives above the vice-president level will be eliminated and there was a public outcry. As an enterprise with 180,000 employees, the number of executives in this round may reach tens or even hundreds.

In the recent series of personnel adjustments of Internet companies, Jingdong has been placed at the center of the storm. At the same time, as the top-down personnel operation knife operator, Liu Qiangdongs iron wrist is no better than his right.

An internal employee in Jingdong said: The head of each first-level Department has recently been talked about by Lao Liu, and some departments have finished talking and disappeared entirely.

Over the past 60 days, the downsizing in Beijing and East China has continued to ferment. In the context of workplace social platform, there are endless negative news about Beijing Easts abolition of express delivery staff base salary and implementation of 995 or 996. Within Beijing East, a tense mood continues to spread. One employee described it like this: Almost everyone just enters the workplace and rushes to work every day for fear of being dismissed.

From the high market value at the beginning of last year to the declining share price, to Liu Qiangdongs encounter with Minnesota incident, over the past year, Jingdong has rapidly fallen from its peak to its trough. Now, the e-commerce giant has reached the most critical moment.

An executive in Jingdong said at an internal meeting that the company had come to an inevitable time, and some investors believed that adjustment and change were the only hope.

From the high-level knife

Jingdong CTO Zhang Chen became the first crab eater.

On March 15, a morning resignation statement from Beijing East surprised the outside world. In 2017, Jingdong declared technology transformation to the outside world. As CTO, Zhang Chen was regarded as a key figure in the transformation of Jingdong.

But after more than three years in Beijing, Zhang Chen may have disappointed Liu Qiangdong. His sense of existence is not high, a person close to Zhang Chen from Jingdong said to all-weather science and technology: CTO in Beijing has long been a virtual job.

In 2015, Jingdong made drastic reforms to the technical framework: for the first time, it separated the technical department from the business department and became an independent technology system, which was mainly divided into two parts: one is the core technology R&D team, including cloud, big data, AI and other technical teams; the other is the applied technology R&D team, which mainly serves the business of Jingdong Mall, and the two teams are directly subordinate to C. TO system.

At first, AI, big data, cloud computing and other departments were all in charge of Zhang Chen, but later these businesses were gradually split up, and there were specific people in charge.

Finally, Zhang Chen basically has no real business in his hands, and is responsible for the intranet infrastructure, or even the OA system, the person said, telling all-weather technology. This directly led to Zhang Chens departure from the front line of business, and his position in East Beijing was once very embarrassing.

At last years 618 start-up meeting, Zhang Chen came out as a guest, but his speeches at the event were edited by the staff themselves, and he himself cant say anything.

In response, Jingdong said that Zhang Chen was mainly responsible for the construction of the groups R&D system, especially in the areas of IoT, information security, international talent introduction, tackling major technical problems, cutting-edge technology research and foreign technical cooperation.

For Zhang Chens departure, Madi, a former Beijing East employee, was not surprised. People and companies have problems. Jingdong has been unclear in the direction of technology, which makes it difficult for CTO to do; Zhangchen himself is too academic, and has been unable to promote the business in the stratum.

The departure of CTO Zhang Chen opened the prelude of this round of executive optimization in Jingdong. Accompanied by Liu Qiangdongs longest time with two professional managers - CLO (Chief Justice Officer) Longyu, CPO (Chief Public Affairs Officer) Lanye have left. To a certain extent, this announces the complete end of the era of airborne executives of foreign enterprises in Jingdong.

According to people close to Beijing East, Zhang Chen and Longyu are often inseparable from each other, they belong to one school, while Xu Lei, the CEO of Beijing East Mall, is a representative of thelocal veteran ministerand they are incompatible.

In the view of insiders in Jingdong, as marginal executives, it is reasonable that Longyu and Lanye are optimized. Before the current round of readjustment, the status of the two men in the eastern part of Beijing had fallen again and again. At the beginning of March, Longyu retired from CHO (the first talent officer) and was no longer in charge of personnel. He was succeeded by Yu Rui, the second management trainee in Jingdong. Lanye has lost his voice since he was transferred to CPO from CMO (Chief Marketing Officer) who holds the power in the second half of 2015.

On April 9, Wang Xiaosong, the president of 7FRESH and Hu Shengli, the president of 3C? Business Department, two senior vice-presidents of Jingdong, were also transferred from their original positions. The reason given by Jingdong is the core executive rotation plan.

Beijing East insiders all-weather technology revealed that Wang Xiaosongs departure may be related to the bad progress of 7FRESH business. Previously, it has been advocated that 1000 stores should be opened in 3-5 years, but now it cant open any more. This year, the maximum number of stores is 30. So far, only 12 stores have opened in 7FRESH, far below expectations.

During the structural adjustment of Beijing East in December last year, Dafaixiao Business Group was split up. As president, Wang Xiaosongs management category was pulled back to 7FRESH and Fresh Business Department, which was interpreted as downgrading. Previously, it was also widely rumored that Wang Xiaosong would go to the United States to serve in the League, but Wang Xiaosong himself denied it.

This round of personnel adjustment in Jingdong reveals two major signs: first, directly from the high-level knife, while in the high-level, the relatively marginal professional managers are the first to choose.

Why choose to start at the top? Because the top is the most difficult to face, the most difficult to promote, which shows the determination of Jingdong, a senior person in Jingdong commented. Compared with Xu Lei and otherold ministers, professional managers are generally not strong in fighting, and the recognition of Jingdong culture is not enough.

Since mid-March, the current round of intensive personnel adjustment in Jingdong has lasted for about a month, but it is still not over. In an internal recording obtained exclusively by all-weather technology, a senior vice president of Jingdong pointed out: After the presidents optimization is completed, the next is the director, and then down is the ordinary staff, which will last until the end of April.

In the online optimization list, Mason, senior vice president and head of technology research and development system of Jingdong, Yu Yongli, former head of Y Business Department of Jingdong, Du Shuang, former general manager of New Access Business Department, and Yang Ping-ren, vice president of supply chain of Jingdong are among the outstanding ones.

However, in the outside world, the adjustment of Jingdong has released some positive signals. A Jingdong investor said that the adjustment of Jingdong made them see hope, instead of being as insensitive and indifferent as before. More investors quipped, If any Internet company is going to lay off its employees now, I think its a promising company.

The feedback from the capital market is the same. In the past month, the share price of Jingdong has risen by 11% instead of falling sharply due to the personnel earthquake.

The arrow is fitted to the string

The company must change. Its time to change. Every department is under tremendous pressure now. For this personnel adjustment, a senior Beijing-East official described it as such.

Now, almost every department is emphasizing the spirit of struggle, some of the outstanding deeds of the old employees have been repeatedly put forward, department leader even directly shouted,no spirit of struggle, go directly.

With this round of personnel adjustment, Jingdong recently restarted the 996 working system, although not compulsory, according to employees in Jingdong, many departments have begun to implement.

Carding on and off duty is more stringent, even KPI is much heavier than before. An employee of Jingdong Finance told all-weather technology, Although there was KPI in the past, it was implemented very generally in the actual business, and now it is assessed monthly according to the volume of business and the new functions of online.

This is the battle state Liu Qiangdong wants. Before the listing, Jingdong was known for its wolf culture, but before the big adjustment, the atmosphere almost disappeared inside the city.

In this regard, a senior Beijing-East empathy: Many departments are overcrowded, Department walls are standing, a large number of people are idling away, more and more bureaucratic. As an Internet enterprise, the efficiency is getting lower and lower, just like a traditional enterprise.

In this case, Jingdong had experienced it before and after 2016. As a result, a large number of professional managers, including Shen Haoyu and Xiong Qingyun, left their jobs one after another, and Liu Qiangdong returned to the front line of management.

At that time, after Liu Qiangdongs return, Jingdong quickly recovered its combat effectiveness. In 2016, after 12 years of sustained losses, Jingdong finally achieved its first full-year profit. However, this momentum has not been sustained. With Liu Qiangdong retreating behind the scenes again, the problems of Jingdong have been exposed again.

The idle working condition has seriously affected the operation efficiency of Jingdong. One Jingdong Guan Peisheng complained, There are 15 people working on his own project, but only 8 people are really working on it. Leaders often pull small factions and say how bad other business groups are.

According to his recollection, last year, Jingdong strongly supported employees to report various exploratory projects. The policy was that only eight people could be self-supporting portals and the post of project manager could be transferred from T (technology) to M (management).

To this end, many project teams exaggerate their own value, This incident led to people at every level wishing to have more projects in their own departments, creating a group of garbage leaders, the whole department almost doubled.

It is understood that many of the people in charge of the exploratory projects that were built hard in those years have been reduced from director to department manager or dismissed directly in this adjustment.

At a recent internal meeting, Liu Qiangdong used to describe the confusion of internal management in Beijing as people are overwhelmed and gangs are formed. It is reported that the meeting is not a small meeting. Participants include CXO, enterprise group SVP and VP. There are more than 100 participants, and many senior executives were named during the meeting. ?

In an open letter dated April 12, Liu Qiangdong once again stressed that the people who fool around are not my brothers. The real brothers must be those who fight together in the rivers and lakes, take responsibility and pressure together, and enjoy the fruits of success together. In the letter, Liu Qiangdong also said that the last elimination system had not been implemented in Jingdong for four or five years, the staff had expanded rapidly and more and more people were idling away, which must be changed.

As a giant enterprise, internal cost control in Jingdong has become increasingly inefficient in the past few years. A senior official in Jingdong disclosed that last year, the cost of purchasing servers in Jingdong Guang was as high as 8 billion yuan.

At present, there are only four types of profits in Jingdong Mall, and the others are all losses. The 8 billion yuan has almost eaten up all the profits of the four categories. Thats why Jingdong is not profitable, because everyones extravagant spending is a great harm to the organization. The above-mentioned high-level said.

The confusion of management and cost control has directly led to the decline of Jingdongs performance.

In 2018, the net loss of Jingdongs continuing business attributed to common shareholders was 2.5 billion yuan; in 2017, the net profit of Jingdong was 168 million yuan. Under non-GAAP, the net profit of the continuing business of Jingdong, which belongs to common shareholders, was 3.5 billion yuan in 2018 and 5 billion yuan in 2017. Both data showed declines in varying degrees.

The inadequate growth of active users has become a worry for Jingdong. As of December 31, 2018, the number of active users of Jingdong Platform was 305.3 million annually, an increase of 20% over the same period of last year. By contrast, the number of active users in Ali and Pingduo increased by more than 30% in the same period.

All-weather technology has learned exclusively that the growth rate of GMV in Jingdong in the past few months has dropped to 20% year-on-year. Q4 in 2018, Beijing East GMV 514.4 billion yuan, an increase of 27.5% over the same period last year, and now the figure is further declining.

For retailers, cash flow is the lifeline. If GMV growth continues to decline, it means that Jingdongs bargaining power with suppliers will be weakened, and measures to obtain cash flow by prolonging the settlement cycle will also be affected.

At the same time with the decline in performance, it is Jingdongs continuous investment in technology. At the 2017 annual conference, Liu Qiangdong shouted, There are only three things in Beijing and East in the next 12 years: technology! Technology! Technology! Jingdong financial report shows that in 2018, the investment in technology in Jingdong was 12.1 billion yuan, an increase of 82.6% over the previous year.

Who was the initiator?

What causes frequent management problems in Jingdong? The outside world has been arguing about this, but there is always a point of view: Liu Qiangdongs personal impact on Jingdong.

At the beginning of its establishment, there was no partnership mechanism and Jingdong was a typical founder of arbitrary enterprises. This gene almost determined the fate of Jingdong from the very beginning.

In the pursuit of efficiency and execution in the retail industry, there is a need for a combatant and forward-looking boss to guide, said Xu Xin, founder of todays capital, such a model allows Jingdong to rise rapidly at the beginning of its establishment. But when the company enters the mature period, decentralization becomes an inevitable choice. At this time, the management problems of Jingdong began to expose.

In May 2014, after the listing of Jingdong in Nasdaq, Liu Qiangdong stepped down as CEO of Jingdong Mall and began to increase the degree of decentralization of the company. Previously, in 2013, Liu Qiangdong tried to leave the company for the first time to study in the United States, while reducing the direct cross-examination of the business front line.

According to Liu Qiangdongs vision, for an enterprise, the Republic is better than its own dictatorship, and peace is better than war. But this is not the case. After delegating power to professional managers, the fighting power and execution culture emphasized by Jingdong rapidly diluted, and the problems of bureaucracy, slack and corruption gradually exposed.

In 2016, Liu Qiangdong returned to the front line of the battle. The top 10 executives of Jingdong Mall and 18 executives of Jingdong Group reported directly to him. On the board of directors, Liu Qiangdong holds 80.2% of the voting rights of Jingdong.

According to previous reports in Caijing, Liu Qiangdong never really delegated power. When he traveled to the United States to study, he would listen to every morning meeting in Jingdong, but most of the time he did not speak.

Beginning in 2016, Jingdong Finance and Jingdong Logistics have separated from the main business of Jingdong and become sub-groups. According to employees in Jingdong, the independence of these sub-groups is not strong, and the decision-making power of each important event is in the hands of Liu Qiangdong.

In the outside world, this is a founder label too obvious business, even now, the success or failure of Jingdong, still highly tied to Liu Qiangdong, the founder of the Supreme authority.

This is a contradictory phenomenon. On the one hand, some people believe that Liu Qiangdongs dictatorship has affected the operation of enterprises in Jingdong. In the view of a senior executive in front of No. 1 store, one important reason why Jingdong has come to this point is Liu Qiangdongs high control and personal high-profile practices, which will put the company in danger once an accident occurs. Therefore, Jingdong urgently needs a second-in-command who can play an important role.

On the other hand, once Liu Qiangdong began to decentralize power, the values and wolf culture in the early stage of Jingdongs entrepreneurship would quickly distort, and the companys combat effectiveness would be seriously weakened.

Another consequence of Jingdongs management problems is the repeated failure of innovation business. As a retail-based enterprise, Jingdong has made little progress in business innovation for a long time. Once out of the main business, such innovations often stop at a glance.

Take smart speakers as an example. In 2014, Jingdong began to lay out this business. It is almost the earliest company in China to make smart speakers. We worked hard for three years, and the supply chain was running, but nobody remembers the Jingdong speakers. A former employee in Jingdong was very depressed about this.

Compared with the IOT? Story created by millet, Baidu and Ali, Jingdong just sells this thing as a merchandise, without shaping the fanseffect, and without shaping the story, the employee said. When Jingdong began to realize the problem, the initiative of the whole market had been taken away by other giants.

Internally, we actually have a lot of creative ideas. We dont want to innovate, we dont want to make mistakes. A former senior Beijing official said. In 2017, when the senior left, he found that Jingdong had made more and more mistakes, and many businesses had been drilling before, Seeing oil soon, but did not persist, withdraw.

Before that, Jingdong had been involved in the business of smart refrigerators and had been working hard for three years, but the products had not been on the market and had not been publicized.

In 2017, Liu Qiangdong was very anxious when he saw the smart refrigerators in AWE?(China Electrical Appliances and Consumer Electronics Exhibition). He stressed to the Ministry of Public Relations in Jingdong that this matter should be enlarged.

Subsequently, Jingdong began to launch the smart refrigerators to publicize, but the people in the procurement and marketing department felt that the goods could not be sold. Many departments could not achieve interconnection, resources did not keep up, and then the person in charge went to start a business, and the project did not go on, said one Jingdong employee who had participated in the smart refrigerators business.

Broken arms for survival?

In response to the spreading crisis and personnel adjustment, Jingdong is constantly looking for opportunities in new business. However, at present, the effect is not ideal.

At the annual report meeting in 2018, Liu Qiangdong stressed that in 2019, Jingdong will focus on three directions: expanding the third and fourth-tier markets, upgrading enterprises digitally and developing offline businesses, which correspond to the three businesses of Jingdong respectively: joint purchase, retail solution services and offline retail business represented by Jingdong 7FRESH.

During the structural adjustment in December last year, Jingdong separated the acquisition business from the three major business groups, and appointed Hou Yan, general manager of Jingdong Wechat Q Business Department, to report directly to Xu Lei, CEO of Jingdong Mall.

According to the internal staff of Jingdong Pingbu, the previous Pingbu did not report to the marketing department, but cooperated with the launch, make a little fuss on your own. This year, the Group has set up a new integrated marketing department of strategic business, which directly connects with new businesses such as 7Fresh, pooling, Toplife and so on. It will give priority to the fast-growing and potential business with a resource budget. ?

In February this year, Jingdong Pickup launched a new round of all-class investment, trying to reduce the dependence on the original platform. In this regard, Xu Lei also mentioned at the analyst meeting of Beijing East Annual Report in 2018 that in addition to continuing to pay attention to and invest in the pooling and Wechat market, in the future, Beijing East will focus on building supply chain capabilities that are more suitable for the pooling and Wechat market.

However, according to the feedback from the businessmen, the competitiveness of Jingdong Buy-in-Buy is still not strong. A womans dress of 40 yuan or so can sell more than 300 pieces in the last week, and less than 20 pieces in the same period in Jingdong, said a clothing dealer.

In order to support the business of pooling, Jingdong has raised the search weight of pooling, but compared with self-owned products, the ranking of pooling commodities is still behind. After more than a dozen pages, you cant find it without brushing volume, a commodity merchant told all-weather technology.

Nowadays, there are many brush quantity groups in all kinds of Jingdong pooling groups. The quotation is usually 10 commissions per unit price less than 100 yuan, 13 commissions per 100-200 yuan. This is a huge cost pressure for businesses.

The most difficult thing to ponder is the attitude of the top officials in the east of Beijing.

At present, Jingdongs merchandising entrance is still deep hidden. In addition to the entrance of small programs and Weixin Jiugongge, users need to click on Jingdong APP - Quality Fashion Column - Jingdong Merchandising to enter Jingdong App. Since last year, we said we should vigorously promote it, but we havent seen any actual action, and the senior level is always hesitant, said the insider of Jingdong Pingbu.

In addition to pooling, offline channels are regarded by Liu Qiangdong as another source of future growth in Beijing. But in just half a year, 7FRESH, the leader of the offline channel, met with a bang.

On April 9, Beijing East 7FRESH and Wang Xiaosong, president of the Fresh Industry Department, were transferred, which is only more than four months before they took over 7FRESH.

All stores dont make money, and the best results are Dazu Square stores, which are supported by employees in Jingdong, with an average daily turnover of 500,000 years, said Wang Feng, an internal employee of 7FRESH.

Operating is also a big problem. Now 7FRESHs top managers come from various retail stores and copy their successful models to different stores. The whole idea is not uniform, and the understanding of retail is not deep. In Wang Fengs opinion, for 7FRESH, the high-level thinking is still wavering. Liu Qiangdong is not satisfied with Wang Xiaosongs work.

It is understood that the previous 7FRESH signature of real estate cooperation is not exclusive, 7FRESH competitors box Ma Xiansheng in order to prevent the opening of standard stores in East Beijing, defensively layout a large area of open space, which to a certain extent led to the 7FRESH shop is not smooth.

At present, Boxed Horse is the way of expanding and operating again. Since last year, Boxhorse has invested intensively in a large number of supply chain enterprises, and even cooperated with them to set up subsidiaries. This is the right way to control the supply chain. 7FRESH is now a joint venture and nothing has been seized, said one retailer.

The blocked opening of stores has resulted in a decline in the attractiveness of brand merchants. Wang Xiaosong elaborated on the competitiveness and advantages of 7FRESH at the restaurant business invitation conference held on December 7th last year, but according to the people from Jingdong who participated in the conference, it was revealed that the 30 restaurant brands that participated in the conference did not respond positively, and all of them left as soon as the meeting was over.

For unsuitable brands, 7FRESH is even a threat: if it does not cooperate with offline, it will be offline.

At the logistics level, Jingdong launched the personal express business last year to enter the C-end market, but it still needs time to test whether it can generate substantial revenue growth in Jingdong.

Jingdong Finance is currently the best developed new business in the whole city, with an independent valuation of over 133 billion yuan. The main source of income of Jingdong Finance is the Supply Chain Finance Department and the Consumer Finance Department, but these two businesses are more dependent on Jingdong Mall. When the business of Jingdong Mall can not grow explosively, it is difficult for them to achieve explosive growth.

Last May, Jingdong Finance separated its business into two groups: personal service and enterprise service. According to people close to Jingdong Finance, the personal service group of Jingdong Finance has recently readjusted, merging insurance, owners, stocks and wealth management in the business sector. Pei Jian, Vice President of Jingdong Group and General Manager of Intelligent Big Data Department of Jingdong Mathematics Section, is also unable to work full-time for family reasons.

For Jingdong, it is a kind of courage to survive by breaking ones arm; how to walk after breaking ones arm also needs wisdom.

In the view of senior analysts of Jianzhi Research Institute, the adjustment and optimization of the current organizational structure is the active choice of Jingdong, which is conducive to the interests of long-term shareholders. Logistics is a basic asset at any time, and retail efficiency is also the result of sustained operation, both of which are barriers. In the future, Jingdong still has the chance to become a good company with sustained returns.

(At the request of the respondents, Madi and Wang Feng are aliased in the article.)

Source: All-weather Science and Technology Responsible Editor: Yao Liwei_NT6056