Another big factory is cutting inwards.

Author | Liu Baodan

Editor | Zhang Xiaoling

After Alibaba Group's split into six and the high-level changes at JD.com, another internet company is also adjusting its organizational structure and undergoing personnel reforms.

That company is KUAISHOU-W.

In 2021, Cheng Yixiao took over as CEO of KUAISHOU-W. In 2022, he conducted multiple rounds of organizational restructuring internally, and now his management scope has extended to all employees.

On August 17th, KUAISHOU-W released a notice on the upgrade of its job grade system, making adjustments to job grades, promotions, and cadre management. According to internal employees of KUAISHOU-W, the company established a job grade system in 2019 due to development needs.

The readjustment of the job grade system after 4 years of implementation indicates that KUAISHOU-W needs to unleash more organizational efficiency from a human resources perspective to adapt to the new stage of development.

Wallstreetcn obtained the original text of the notice and found that the focus of the adjustment is still on the rules for job grade promotions. The dual track system of professional and managerial positions has been changed to a single track system. Specifically, the professional positions from level 14 and the managerial positions from level 9 have been adjusted to a total of 10 levels from E6 to E15, named after "Excellence".

The new job grades correspond to new promotion methods. According to the notice, employees at E10 and below will continue to have two promotion windows per year, while employees at E11 and above will have one promotion window per year starting from 2024.

This adjustment first gives more encouragement to ordinary employees. The company stated that it aims to optimize the promotion mechanism, allowing employees to have more opportunities for faster promotion and frequent feedback on their growth.

A KUAISHOU-W employee who recently joined the company told Wallstreetcn that the previous promotion mechanism had a requirement for the duration of each job grade, where one had to stay in a job grade for a year before being promoted. Now, at least there are more opportunities for promotion.

As for managers, KUAISHOU-W has raised higher requirements, emphasizing longer-term capability accumulation and achievements.

Only employees at E10 and above are eligible for promotion to KUAISHOU-W's management positions, and appointments are required. Moreover, KUAISHOU-W proposes that managers should not only have experience but also possess excellent professional skills. In the future, "KUAISHOU-W Leadership Principles" will be introduced to upgrade the requirements for managers.

In the past few years, KUAISHOU-W's revenue scale has rapidly approached the trillion yuan level from the hundred billion yuan level, and the management team has also grown. Now, KUAISHOU-W has increased the difficulty of selecting its management team, which implies an optimization of salary reduction.

Similarly, JD.com and Alibaba have also undergone similar adjustments. The first thing Liu Qiangdong did after his return was to reduce the salaries of senior executives, and Alibaba requires appointments for positions above P9, adjusting salaries based on performance. P9 executives with an annual salary of 3 million yuan have fallen from grace.

From incremental markets to a game of market share, the internet industry has entered a new stage of development. In order to cope with the pressure of profit growth, cost reduction and efficiency improvement have become standard actions for major companies, and KUAISHOU-W is no exception.

In the first quarter earnings call this year, KUAISHOU-W stated that one of the paths to cost reduction and efficiency improvement is to establish a baseline for human resource costs and achieve continuous optimization, while paying more attention to improving personnel effectiveness. Earnings Report data also reflects this trend. In 2022, KUAISHOU-W had a workforce of 28,000, a decrease of 7,347 compared to last year. However, the average revenue per employee increased by 28% YoY to 3.7 million.

Regarding the reasons for the changes in the job hierarchy, KUAISHOU-W stated in the notification that management orientation and talent requirements need to "adapt to the times."

Currently, KUAISHOU-W is facing an increasingly competitive internet industry.

At present, KUAISHOU-W's performance growth seems to be good. Seizing the live streaming dividend, KUAISHOU-W has become the second largest live e-commerce platform in China and achieved profitability after 12 years of losses. These achievements are indeed remarkable.

However, behind these achievements, KUAISHOU-W, which is still in the second tier, faces even more brutal competition pressure.

Recently, Alibaba and JD.com have successively released their earnings reports, showing good growth momentum, especially steady user growth. During Alibaba's 618 shopping festival, the total number of active users reached 915 million, further expanding its leading advantage. JD.com also stated that its user indicators for the second quarter are positive.

The e-commerce field has entered a fierce battle for market share, which means that companies are in a zero-sum game. KUAISHOU-W has already felt the real threat.

Taking the 618 shopping festival as an example, data from Xingtu shows that the total transaction volume across all platforms this year was 798.7 billion yuan, with the growth rate being the lowest in nearly 3 years. In the live e-commerce sector, KUAISHOU-W has been surpassed by Taobao and dropped to third place.

More importantly, the counterattack of the two e-commerce giants, Alibaba and JD.com, has just begun. Douyin, Pinduoduo, and other emerging forces are also gearing up for battle. KUAISHOU-W, caught in the middle, is hard-pressed to find a breakthrough strategy, and the future will undoubtedly be extremely challenging.

In the era of social media, the principle of "winner takes all" is taken to the extreme. If a company cannot reach the top three, its presence will experience a significant decline.

In the notification, KUAISHOU-W stated that industry growth rate and cycles are changing, and short videos + live streaming still represent a promising track in the internet industry, but challenges and opportunities coexist.

Seemingly just a routine job hierarchy adjustment, but in the midst of the intense e-commerce war, KUAISHOU-W is filled with hidden anxieties and increasing pressure. It remains to be seen how Cheng Yixiao will resolve them.