Users of China's bike-sharing company ofo sought to withdraw their deposits via the platform's app on Monday after a media report earlier in the day said that ofo is cutting staff amid an executive exodus.
Domestic news site huxiu.com said ofo is laying off 50 percent of its workforce and further cuts are likely, the result of funding problems.
The high-level management team is experiencing radical change, with the resignation of three senior executives, including Yang Xun, the director of public relations, and Chief Operating Officer Zhang Yanqi. Zhang was in charge of ofo's overseas business, which the huxiu.com report said has folded.
An executive of ofo denied the media report later on Monday, terming it "nonsense."
Yu Xin, a co-founder of ofo, said on his WeChat moments that among ofo's overseas businesses, its Singapore division alone generates more revenue than "a certain competitor's" entire revenue. "Wouldn't it be inappropriate to directly 'scrap' such a business department?" Yu said.
Yu said that there seems to be "hidden" source speaking to the media.
Meanwhile, Yang said on his WeChat moments that he is still at ofo.
But the denials didn't ease users' concerns, and many continued trying to get their deposits back, the Global Times observed.
A user surnamed Wu told the Global Times Monday that many of ofo's bright yellow bikes are too broken to use, so he decided to withdraw his deposit of 99 yuan ($15.45).
Ofo may be denying reports of problems to maintain its image and high market valuation, which will support the capital market's confidence, according to the huxiu.com report.
Ofo raised $866 million in a new funding round led by Alibaba Group Holding in March, the largest investment in a single round by a bike-sharing start-up.
Prior to a $700 million funding round in July 2017, ofo CEO Dai Wei revealed in a CNBC interview that the company was worth $2 billion. Ofo has yet to disclose an updated valuation.
Zhao Xiang, an analyst at Beijing-based research company Analysys, told the Global Times on Monday that ofo is under more pressure than its major rivals - Mobike, which was bought by Meituan-Dianping for $2.7 billion in April, and Shanghai-based Hellobike, backed by Alibaba.
"After an industry reshuffle last year amid intense competition via price subsidies, this year's trend for the major players is joining the right team and realizing long-term, sound development," Zhao said, adding that ofo will face difficulties if it insists on declining offers from cash-rich investors.
Zhao said investors have become more cautious since the Mobike takeover, which was below the company's last valuation of $3.8 billion.
