Market rumors suggest that Beihaojia, a subsidiary of KE Holdings Inc., has laid off over 35% of its staff. However, KE Holdings has denied these claims as false. The company emphasized that Beihaojia's core team remains stable, has launched 18 multi-mode cooperative projects nationwide, and continues to have ongoing recruitment plans in various locations.
There is a perceived lack of honesty in KE Holdings' denials. This is particularly evident given that the company completed a significant, sweeping round of layoffs across its entire platform by the end of last year, and job cuts at Beihaojia were widely anticipated.
As the real estate development arm of KE Holdings, Beihaojia had its operations paused by Chairman Peng Yongdong as early as August of last year. Peng stated that the company would no longer acquire land independently. Based on already committed capital, Beihaojia's available incremental investment funds are capped at no more than 1 billion yuan, and future collaborations will not involve capital solutions.
These strict financial constraints effectively set a clear boundary for Beihaojia's development: no further capital injections, with future growth, contraction, or exit dependent solely on the profitability of existing projects.
Despite this, Xu Wangang, Vice Chairman of KE Holdings and CEO of Beihaojia, asserted at the end of last year that while independent land acquisition had ceased, the subsidiary's self-managed projects had been successful. Such stubborn justifications appear fragile in the face of harsh market realities.
To date, the two projects managed directly by KE Holdings cannot be deemed successful, and the financial success of its "equal equity, equal rights" cooperative projects remains unproven.
Entering 2026, with policy support falling short of expectations and a slow market recovery, coupled with management's definitive stance on Beihaojia's role, even without formal layoffs, employee attrition is expected to be high. Over the past two to three years, KE Holdings recruited hundreds of professionals—around 300 to 400 in total—from prominent developers like Longfor, Vanke, Gemdale, and China Jinmao in areas such as investment, design, and cost management. Many who joined with high hopes are now facing departure.
As a giant in the real estate transaction sector with extensive and complex operations and a large workforce, KE Holdings struggles to maintain consistent service quality without robust systems and corporate values. This often results in a significant perception gap. Senior executives frequently promote an idealized vision, but market reactions are poor, and frontline employees often feel discontented.
A case in point is the incident earlier this year at KE Holdings' Hangzhou office, where agents were incentivized to lower listing prices by 5% or more. After halting the activity and penalizing those responsible, the company still insisted it was merely an isolated case of "irregular operations by individual teams in Hangzhou." This disconnect stems from KE Holdings' dominant platform nature, its complex business model, and the pressure on employees to take risks for survival during an industry downturn.
For the entire KE Holdings platform, survival is challenging. However, management's lofty rhetoric should translate into systemic support and humane care for frontline staff to sustain the overall platform.
The joint donation by Chairman Peng Yongdong and founder Shan Yigang is another instance that fosters a sense of insincerity. Seemingly in response to controversy over Peng's 700 million yuan annual salary, he donated 9 million shares worth 440 million yuan alone in April last year. Before this year's annual report was released, Peng and Shan jointly donated another 10 million shares valued at 400 million yuan to the "KE Holdings Foundation," purportedly benefiting over 500,000 internal employees and platform service providers.
KE Holdings repeatedly stated that this "fulfills a long-term commitment to service providers and is not directly linked to executive compensation." This raises the question: why did Peng and Shan receive such exorbitant compensation in the first place? After the passing of founder Zuo Hui, to retain Peng and Shan, KE Holdings granted them a one-time award of 126 million restricted shares, valued at over $600 million. The company initially claimed this was to comply with a requirement for its secondary listing in Hong Kong, mandating that super-voting right holders hold at least 10% of the economic interest.
In reality, the founder's family, through voting rights arrangements and a change in the nature of Peng's shares, had already met the 10% threshold, which did not impede the subsequent listing. The donations by Peng and Shan, being their first share sales—albeit under the guise of charity—touch a sensitive nerve. According to the original incentive plan, they still hold over 1.5 billion yuan in restricted shares not yet vested, and their annual compensation for 2025 is expected to remain in the hundreds of millions.
Peng seems unwilling to acknowledge that, following the withdrawal of the founder's family, he has become the true controller and primary beneficiary of KE Holdings. This lack of transparency creates a significant communication barrier, especially when the entire platform is struggling to generate profits.
In stark contrast, Zuo Hui once candidly stated during a 2018 public lecture, "Frankly, looking at Lianjia over the years, who has benefited the most? Sometimes in the quiet of the night, I feel deeply ashamed because, clearly, I have been the biggest beneficiary." He outlined KE Holdings' priorities as: first, serving customers well; second, taking care of agents; third, supporting store managers and owners; fourth, caring for KE employees; and lastly, considering shareholders.
Clearly, the current KE Holdings is different from the company under Zuo Hui's leadership.
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