Update: Ofo confirmed that it is undergoing layoffs in the U.S. but would not say what percentage or number of employees will be let go. “We certainly are reorganizing,” said Tom Sarris, a communications lead for Ofo. “We will remain in the US. It’ll be a smaller footprint than we currently have.” Sarris would not say whether Ofo will remain in Seattle but did confirm that new fees the city is considering are “certainly a factor.”
News of the layoffs reportedly came from Ofo’s Beijing headquarters. Bikesharing has become a saturated market in China and is just starting to pick up in the U.S. In Seattle, one of the first cities to venture into dockless bikesharing, Ofo competes with American companies Lime and Spin.
Seattle is considering a new set of regulations to govern dockless bikeshare that would include a $250,000 annual permit. Lina Feng, Ofo’s Seattle general manager, attended a City Council committee meeting Tuesday to dispute the proposed fee.
“This program has been a great success in the past year,” Feng said at the meeting. “Moving forward, we do strongly urge the city to consider the full implications of some of the regulations that are being discussed today and their longer impact on this nascent industry that’s been quickly consolidating.”
Feng’s appearance suggests Seattle may be one of a handful of U.S. markets Ofo plans to continue operating in but the future of the yellow bikes in the Emerald City remains unclear. Ofo did not immediately respond to GeekWire’s request for comment.
At the meeting, Feng went on to say that the fee could “pose a threat to the health of this industry.”
In March, Ofo raised a whopping $866 million funding round led by Alibaba, China’s rival to Amazon. Dockless bikesharing has become one of the most heavily venture-backed industries.
Reports of widespread layoffs come after months of rumors about Ofo’s financial trouble. In a June interview with Technode’s Chinese sister site, Ofo co-founder Yu Xin denied allegations that the company was laying off 50 percent of employees and its COO.