Shulou(Shulou.com)11/24 Report--

After the share price fell more than 70% after the lifting of the ban by shareholders, Shangtang once again stood on the edge of the tuyere.

Recently, Shangtang Technology reported the layoffs of the company. According to previous reports, in this round of adjustment, the Smart City Enterprise Group, the core business of Shangtang Technology, has become a key area, with about 500 people leaving, a reduction of more than 25%, and even business teams have been eliminated as a whole.

In the subsequent response, Shangtang Technology told Sina Technology, "so far this year, the total number of employees of the company has increased slightly." As a fast-growing scientific and technological innovation enterprise, Shangtang will adjust its organization and talent structure according to the market environment and its own situation, in order to better meet the business development. The overall business development of Shangtang is normal, social recruitment and school recruitment are still in normal progress, and the company's talent strategy has not changed. "

The understated response masked the fact of layoffs in the company's core business, but it could not hide the hidden worries behind the layoffs in Shangtang's core business.

Is the commercial soup out of soup? On the pulse, the discussion about Shangtang technology layoffs is still continuing, netizens are still curious to ask, "which department has laid off staff? how much is the compensation for layoffs?" Some netizens also revealed that the hardest-hit area of Shangtang's layoffs is the smart city business group, with the proportion of layoffs as high as 50%. Another former Shangtang technology employee said that his previous department, the Beijing area, was basically ended up in one pot.

Under the heated discussion, the fact that Shangtang Technology has laid off staff can no longer be refuted. In communication with Sina Technology, Shangtang did not deny layoffs. But also further stressed, "while adjusting the smart city business, Shangtang is also increasing the smart car business." According to reports, at present, Shangtang Intelligent Automobile Group has more than 1000 employees, at the same time, the company is still promoting personnel recruitment, and has opened internal job transfer opportunities, and those with self-driving and other car-related experience can apply to join.

When the smart city business is already facing the problem of downsizing, the new smart car business has become a magic weapon for Shantang to reverse public attention. But will this really work?

After reviewing the development history of Shangtang technology and financial reports over the years, it is found that since Professor Tang Xiaoou led a team to publish a series of DeepID face recognition algorithms in 2014, the smart city business based on intelligent security has rapidly developed into the core business of Shangtang technology, and has long been the core revenue source of Shangtang technology.

According to Shangtang Technology Financial report, in the first half of 2022, Shangtang Science and Technology Smart City business accounted for more than 31% of the total revenue, second only to smart business business, and far higher than smart car business, which accounts for only 9% of revenue. In 2021, smart city-related businesses accounted for 45% of Shangtang's revenue.

When core businesses, which have long accounted for more than 30 per cent of revenue, began to lay off staff, Shangtang's situation seemed less optimistic.

You should know that before that, the net losses of Shangtang Technology from 2018 to 2021 were 3.433 billion yuan, 4.968 billion yuan, 12.158 billion yuan and 17.8 billion yuan respectively. Even after the adjustment, the net loss amounted to $150 million, $1.155 billion, $708 million and $1.42 billion.

On June 30 this year, with the lifting of the ban by cornerstone investors and early shareholders of Shangtang Technology, its share price also fell 46.77% in a single day. Since the high point on January 4, the share price of Shangtang Technology has fallen by less than 74%, and its market capitalization has lost more than HK $200 billion.

Behind the long-term loss, it reflects the common fault that it is difficult for Shangtang to make a profit as a whole. After cornerstone investors began to abandon it, Shangtang Technology, which has poor profitability, also began to step into the stage of layoffs and downsizing.

How to find the source of running water? On the one hand, there is a decline in revenue in the core business, as well as a reduction in personnel and size. On the other hand, the cost of Shangtang technology is still increasing. Among them, the high R & D investment, the rising cost of sales and the sky-high salary of senior executives are becoming the inevitable hard cost expenditure of the company, while constantly reducing the company's profit margin.

According to Shangtang Technology's financial results for the first half of 2022, Shangtang Technology's revenue in the first half of this year was 1.415 billion yuan, down 14.3% from the same period last year. However, in terms of expenditure, R & D investment increased by 14.88% year-on-year to 2.035 billion yuan, becoming the main expenditure item. At the same time, Xu Li, Wang Xiaogang and Xu Bing, three directors of Shangtang Technology, were paid a total of 1.192 billion yuan, accounting for 84 per cent of the company's revenue.

The rate of income is far from catching up with the speed of commercial soup burning money. In fact, behind the decline in revenue in Smart City, Shangtang Technology is also actively laying out new businesses and promoting new business attempts in order to find new business growth breakthroughs.

In addition to the smart car and meta-universe businesses that Shangtang has often mentioned in the past two years, in August this year, Shangtang also launched a new product, "Yuanradish SenseRobot" AI chess robot, for C-end consumers. It's just that as Shang Tang's first consumer-oriented product, this chess robot was endorsed by Guo Jingjing, but the market response was not strong.

As of press time, the monthly sales of this product are only about 100 units on the flagship store pre-sale pages of Tmall and JD.com platforms. At the same time, it also led to a large number of negative comments such as inability to connect to the Internet, functional chicken ribs, pseudo demand and so on.

For Shangtang technology layoffs, a number of industry insiders said it was not surprising. Zhang Jun, chairman of China Europe Capital, said bluntly to Sina Technology: "this is expected and reasonable." Some industry insiders commented that, "traditional business revenue decline, profits are far away, investors lose confidence, C-end new business needs time to verify, Shangtang Technology is facing the embarrassment of disconnection."

In the early years, most AI enterprises attached too much importance to valuation and the number of papers, but delayed their efforts in the commercial landing link. When the economic environment was good, they could still make some achievements by relying on government projects and market dividends, but when the market environment was bad, this model began to be difficult to sustain.

With the popularization and development of AI technology, more and more enterprises begin to pour into the AI track. At present, a series of domestic enterprises, including Ali and Huawei, have the capability of AI self-research, and some traditional enterprises have begun to build their own intelligent applications based on the open source available AI technology capabilities, combining their own business and scenarios. The competition in the field of AI has evolved from technological competition to the competition of scene, ecology and even professional knowledge.

On the basis of tamping the internal skills of technology, we should form our own circle ability and build a moat in some industries, rather than blindly chasing the tuyere.

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