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Business - May 6, 2019

Tech sector to cut off 20 percent investment staff

About 20 percent investment staff will loose their place in Sequoia Capital China, following a slowdown in the country’s tech sector saps appetite for risk, said two people with knowledge of the matter.

The Chinese arm of Silicon Valley venture capitalist Sequoia Capital is looking to cut the number of venture investment professionals from about 70, the people said. Two other people said the cut would be at least 10 percent.

Sequoia China told Reuters it regularly reviews its workforce which may result in personnel adjustments.

“Within the last 12 months, we had 13 new investment professionals join Sequoia China, which slightly increased our total number of employees,” it said in a statement.

The layoffs would come after a government campaign against debt financing left start-ups vying for shrinking pools of fresh capital. Meanwhile disappointing returns from firms going public amid market volatility has made investors bearish, resulting in down rounds – where a firm’s valuation in a round of fundraising falls below that of a previous round.

Chinese venture capital and private equity managers raised a combined $1.5 billion for investment across all sectors in the first three months of 2019, a far cry from the $9.4 billion of the same period last year, according to data provider Preqin.

Sequoia China’s job cuts began in late March and have mainly affected the venture capital arm’s technology & media, healthcare, consumer and industrial technology teams, two of the people told Reuters, declining to be identified as the information was not yet public.

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