While the real estate sector undergoes a profound adjustment, KE Holdings Inc. (BEKE) has delivered a surprisingly robust performance. In 2025, a year marked by widespread losses across domestic real estate developers, KE Holdings still managed to post a substantial net profit of 29.91 billion yuan, despite a year-on-year decline of nearly 27%, solidifying its position as a highly profitable entity within the industry.
The key takeaway is that this 30 billion yuan net profit was achieved primarily through significant workforce reductions and cost-cutting measures, against a backdrop of a slowing real estate market, minimal revenue growth, and declining commission rates.
On the revenue side, KE Holdings' total revenue for 2025 reached 946 billion yuan, representing a mere 1.2% increase compared to the previous year. Conversely, on the cost side, the company's total human resource expenses decreased by 7.4%, resulting in savings of 31 billion yuan.
Furthermore, last year, KE Holdings also reduced its sales and marketing expenses by 5.8% and its general and administrative expenses by 9.9%. The operating expense ratio decreased by 1.4 percentage points.
Overall, it appears KE Holdings implemented cost-reduction and efficiency-improvement measures across the board, with the most impactful action being workforce reduction. By the end of 2025, the total number of employees at KE Holdings dropped to 119,245, down from 135,072 at the end of the previous year. This represents a net reduction of 15,827 employees for the year, a decrease of over 11.7%, and was the crucial factor in preserving the nearly 30 billion yuan net profit.
The following chart, based on KE Holdings' public financial data, illustrates the impact of human resource costs on net profit. It clearly shows that personnel costs are the company's largest expense item and a key variable affecting profitability.
Consequently, since 2021, KE Holdings has consistently worked to reduce its total human resource costs, leading to a general downward trend in the proportion of these costs relative to revenue. However, even by 2025, human resource costs still accounted for over 40% of total revenue. This high proportion is the core reason behind the frequent reports of large-scale layoffs at KE Holdings in recent years; to boost net profit, the company must implement more aggressive workforce and salary reductions.
Between 2021 and 2024, KE Holdings' total human resource expenses decreased from 480 billion yuan to 417 billion yuan, a net reduction of 63 billion yuan. Correspondingly, the company's financials shifted from a net loss of 525 million yuan to a net profit of 40.78 billion yuan, demonstrating an immediate effect from cost-cutting.
Ironically, KE Holdings appears to apply a double standard regarding human resource cost reduction. While total human resource expenses decreased by 63 billion yuan from 2021 to 2024, the combined compensation for core executives Peng Yongdong and Shan Yigang surged from 15 million yuan to 700 million yuan. The proportion of executive compensation relative to total human resource costs skyrocketed from 0.03% in 2021 to 1.68% in 2024.
This stark contrast—decreasing overall personnel costs alongside a sharp rise in top executives' pay—is the fundamental reason Peng Yongdong and other KE Holdings executives have frequently faced public scrutiny in recent years.
A significant portion of the compensation for executives like Peng Yongdong is paid in stock. According to financial reports, share-based compensation expenses at KE Holdings were approximately 1.9 billion yuan in 2025 and 2.726 billion yuan in 2024. Of the 2024 amount, Peng Yongdong and Shan Yigang received about 25%, totaling 681 million yuan in stock, plus 19.48 million yuan in cash, bringing their combined compensation to around 700 million yuan for that year. For 2025, if their share remains at 25% of the 1.9 billion yuan in share-based compensation, plus cash components, their total compensation is estimated to be around 500 million yuan. Precise figures await the full disclosure of the 2025 financial report.
It is important to note that the reported 2025 net profit of 29.91 billion yuan does not exclude the 1.9 billion yuan in share-based compensation expenses. If this non-cash expense were added back, the net profit for 2025 would increase by 19 billion yuan to approximately 49 billion yuan. This adjusted figure is very close to the company's reported non-GAAP net profit of 50.17 billion yuan.
Therefore, after adjusting for the share-based compensation, the effect of the workforce and salary reductions in 2025 becomes even more pronounced: the net profit was not 30 billion yuan, but over 50 billion yuan.
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