More staff jettisoned as cash crunch looms for loss-making Ofo

Last week BikeBiz predicted that Ofo’s woes were such that it might have "lost not just the battle but also the war". This followed news that the Chinese dockless firm was scaling back in the UK and pulling out of some markets, including India. Now the independently owned company has laid off 70 of its 100 US workers, and it has been revealed that in the UK key staff let go include PR manager Matthew Sparkes.

Sparkes is currently working out his notice and remains tight-lipped on the ongoing plans for the company, but he repeated the official line that Ofo remains committed to big cities such as London.

A statement from the US operation said: "As we continue to bring bike share to communities across the globe, Ofo has begun to reevaluate markets that present obstacles to new, green transit solutions, and prioritize growth in viable markets that support alternative transportation and allow us to continue to serve our customers."

The remaining staff have been told the US operation is “going into sleep mode."

As well as the US hibernation and pulling out of India, Ofo has also recently closed down its operations in Israel, Australia and Germany. 

Rumours have been rife in the bike share world that, because of its rapid global expansion, Ofo has been suffering financial problems. Despite an influx of fresh capital from Alibaba – China’s Amazon – the company founded in 2014 by students at Beijing’s Peking University is struggling against competitor Mobike and is nowhere near to turning a profit. Ofo appears to be running out of both cash and time.

Co-founder and CEO Dai Wei has been holding crunch talks with investors and, in order to keep the company afloat, analysts believe he and his four fellow co-founders will have to relinquish control.

Dockless bike share marches on, but with at least one of the major players – and one of the originators of the Chinese model – going into "sleep mode" in some key markets it’s becoming increasingly clear that getting dockless to scale needs almost limitless cash and, for the moment at least, it’s Mobike that has the deepest pockets.

Mobike was founded in 2015 and in April was sold to Meituan-Dianping, a Chinese on-demand online services firm, for a reported $2.7 billion. The dockless firm’s founding executives Wang Xiaofeng and Hu Weiwei remain in charge.

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