WeDoctor to Cut Workforce After Delay in Going Public, Sources Say

(Bloomberg) -- WeDoctor, one of China's leading online health-care platforms, is laying off a substantial chunk of its workforce after plans for an initial public offering were disrupted, according to people familiar with the matter.

The Tencent Holdings Ltd.-backed startup has already trimmed back to about 3,000 employees from about 4,000 last year, said the people, asking not to be identified because the details are private. WeDoctor will likely cut more jobs to a total of mid- to low- 2,000s, they said. It will also reduce base salaries and shift compensation for some people to performance-related bonuses, they said.

WeDoctor filed for a IPO in Hong Kong last year, but Beijing's sweeping crackdown on the country's private sector has disrupted many such offerings. The overhaul is aimed at repositioning the company as it explores going public via a potential merger with a special purpose acquisition company, instead of a traditional IPO, the people said. Startups face tighter listing rules, particularly if they collect sensitive data like the medical information WeDoctor handles.

In an e-mailed statement, the company said that it is optimizing its business lines and will adjust staff and salaries accordingly. The company is improving its compensation system to provide better incentives for employees.

WeDoctor had raised about $400 million in a pre-IPO round from investors including Sequoia Capital China and Millennium Management LLC at the end of 2020, Bloomberg News has reported, and had begun talking with investment bankers about the planned IPO. The company rehired Jeff Chen as chief strategy officer to look after capital markets and the listing process.

WeDoctor is part of a flock of technology companies aiming to transform China's health-care system with advanced technology. The medical platform spans insurance policies, medical supplies, online appointment-booking and clinics. The national health-care operator, which covers more than 95% of the population, is working with the firm to provide insurance-covered health care.