It was an unusually frigid December weekend when Cheng Wei summoned his inner circle to his Beijing office. The founder of Didi Global Inc., dressed entirely in black, told his lieutenants to slash spending by a fifth in 2022 and begin layoffs after staff return from Lunar New Year vacations. He delivered his bombshell flanked by a giant slide that read: Don’t live with illusions. Face reality“We had a tough year,” said the reserved billionaire known as Will, who that day seemed even gloomier than normal, according to people briefed on the gathering. “But next year will be even tougher.”
That somber gathering encapsulated what many in the room already suspected -- the ride-hailing champion once feted for running Uber Technologies Inc. out of China was no more. In its place was a defeated shell worth a fifth of its value at the peak, bleeding users, blocked from raising funds for cherished projects -- and whose executives were constantly wary of provoking Beijing was an unusually frigid December weekend when Cheng Wei summoned his inner circle to his Beijing office. The founder of Didi Global Inc., dressed entirely in black, told his lieutenants to slash spending by a fifth in 2022 and begin layoffs after staff return from Lunar New Year vacations. He delivered his bombshell flanked by a giant slide that read: “Don’t live with illusions. Face reality had a tough year,” said the reserved billionaire known as Will, who that day seemed even gloomier than normal, according to people briefed on the gathering. “But next year will be even tougher That somber gathering encapsulated what many in the room already suspected -- the ride-hailing champion once feted for running Uber Technologies Inc. out of China was no more. In its place was a defeated shell worth a fifth of its value at the peak, bleeding users, blocked from raising funds for cherished projects -- and whose executives were constantly wary of provoking Beijing Didi’s ordeal since it debuted in New York despite regulators’ objections has become one of the clearest object lessons in the dangers of doing business in China. Through interviews with more than a dozen insiders, staff and Didi investors, a picture emerges of how an $80 billion company was brought to its knees in a matter of months by a series of unprecedented government decrees shed about 80% or more than $60 billion of market cap in a year -- the single biggest destruction of shareholder value ever witnessed over the first 12 months of an Asian IPO that raised over $1 billion. To investors and executives who’ve struggled for decades to come to grips with the world’s No. 2 economy, the Didi saga is a jarring tale of competing government factions, billionaires’ miscalculations -- and the systemic failure of even the savviest tech industry leaders from Alibaba Group Holding Ltd. to Tencent Holdings Ltd. to gauge a rapidly changing climate under Xi Jinping’s watch There cannot be business as usual again, not after looking at this saga,” says Fraser Howie, co-author of “Red Capitalism: The Fragile Financial Foundation of China’s Extraordinary Rise.” “Didi is part of a very worrying picture of how domestic private companies are treated, let alone how foreigners are treated in China, and I don’t think that can ever be forgotten
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