By LIU Yanqiu

Online video platform iQiyi is in the process of laying off as many as 40 percent of its employees, according to local media Yicai.

iQiyi reported gross revenue of 7.6 billion yuan (US$1.2 billion) in Q3, but debt has gone from 1.2 billion yuan (US$200 million) last year to 1.7 billion yuan today.

Many young adult shows were canceled after one show encouraged viewers to buy milk and scan a QR code inside the bottle caps to support their favorite star on the show. The show was blamed when large amounts of milk were poured down the drain by fans who were only after the caps. Then, in October, most video platforms abandoned widely-criticized early access fees. These allowed some viewers to watch TV episodes before they were available to others.

Short-video platforms Douyin and Kuaishou are spending money like water, swamping their competitors. Of advertising revenue spent on online video platforms in the first half, iQiyi only got 4.5 percent while Douyin took away a huge slice of 30 percent.

Studios are shutting down. Not long ago, CEO GONG Yu said content was the company’s most important asset. At the time, Gong claimed iQiyi had plans for more film and anime studios to make high-quality drama series. Industry gossip suggests that about 30 percent of iQiyi’s content arm will be shown the door.

iQiyi did not respond to Jiemian News’ inquiry for comment.