BEIJING, December 3 (TMTPOST) — Chinese online video platform iQIYI is reportedly planning to lay off 20% to 40% of its employees, according to internal sources on Chinese professional networking platform Momo.

About 1,544 to 3,088 employees will be laid off if the rumors prove to be true. iQIYI had 7,721 employees at the year-end of 2020.

Employees who are older, have stayed with the company for longer years or take higher salary from the company are reportedly the main targets for the layoff plan. Employees that are still in their probation period will also be laid off.

Some departments in the company will be entirely dismissed, internal sources said on Momo. Even departments that are making money, such as content and smart hardware, will have to lay off some of their employees. Departments that generate a large amount of cost for the company, including marketing, will need to reach a layoff goal of over 30%. Some departments even have a target of 50%.

Most of the company’s employees at iQIYI Research Institute and iQIYI Research Center will be let go, according to sources.

The company’s short video business will have to lay off over 50% of its people after merging with other iQIYI products.

So far iQIYI has not made any comment on the reports.

The massive layoff plan might be linked to iQIYI’s continuous financial loss. According to the iQIYI’s third-quarter report this year, the company’s revenue reached 7.6 billion yuan (around US$1.2 billion) in Q3, registering year-on-year growth of 6%. The company faced a net loss of 1.7 billion yuan (around US$268.4 million), a sharp 40% increase from the same period of last year.

It is worth noting that iQIYI has always ranked No.1 in the long video app category in monthly active users when it has been losing money. The company’s financial loss has actually been increasing drastically over the years except for 2020 as its financial results performed better due to the pandemic.

“The lack of long video content impacted the operation of the website,” Gong Yu, the company’s CEO said when commenting of the Q3 results. “We only have one third of the amount of TV shows we used to have this year. We are having troubles getting new shows online because of the assessment process. The quality of the TV shows is not as good either.”