BEIJING (Reuters) – China’s online used car trading platform Renrenche aims to cut as much as 60 per cent of staff as it battles tight funding and fierce competition, a source familiar with the matter told Reuters on Monday.

The move comes amid a slowdown in China’s tech sector that has led to caution among venture capitalists, underperforming IPOs and staff layoffs by companies such as JD.com.

Renrenche, a startup backed by Tencent, Didi Chuxing and Goldman Sachs, is struggling to expand its business portfolio, said the source, who sought anonymity in the absence of authorization to speak to the media.

The source, who was briefed on the situation, also confirmed the authenticity of an internal e-mail signed by Renrenche’s founder, Li Jian, and circulated on Chinese social media last week, saying the company expected the restructuring would boost efficiency and speed decision-making.

Renrenche did not immediately respond to an email from Reuters on Monday to seek comment. It was not immediately clear how many employees the company has.

Used car sales in China have also declined amid a contraction in overall car sales, which dropped 3.29% in May, says key industry body China Automobile Dealers Association (CADA).

However, Chehaoduo, the parent company of Renrenche’s main domestic competitor, Guazi.com, raised $1.5 billion from the SoftBank-led Vision Fund in February.

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