KE Holdings Inc. (BEKE) has once again sparked controversy with its latest round of layoffs. Reports indicate a large-scale workforce reduction, with some departments facing cuts as high as 30%.

Employees revealed that the layoffs disproportionately affected the product and research (P&R) teams, including senior positions, with some tenured staff of over a decade also being let go. While the company is offering an N+4 severance package, insiders clarified that this includes N+1 plus three months of year-end bonuses, which most employees would typically receive anyway.

A company spokesperson denied the 30% layoff claim, stating the actual figure is below 0.5%. As of June 2025, KE Holdings had approximately 131,800 employees, suggesting around 650 job cuts.

This is not the first time KE Holdings has downsized. Since 2021, the company has undergone multiple restructuring efforts. By June 2025, its workforce had shrunk by 3,200 compared to the previous year. Meanwhile, Q3 2025 net profit plunged 36.1% year-over-year, reflecting continued pressure on its core real estate business.

To counter slowing growth, KE Holdings is pivoting toward its "One Core, Three Wings" strategy, with new businesses now contributing 45% of revenue. However, lower margins in these segments have failed to offset declines in traditional operations, prompting cost-cutting measures.

Despite layoffs, the company increased R&D spending by 13.2% in Q3 2025 to approximately $650 million, emphasizing AI integration in leasing and core services.

KE Holdings' stock has fallen over 70% from its peak of $75.056 to $17.23 as of the latest close. While the company has repurchased $2.3 billion worth of shares since 2022, major investor China Vanke recently exited its position completely, ending a strategic partnership dating back to 2017.

The real estate downturn continues to weigh on KE Holdings' performance. In Q3 2025, while existing home transaction volume grew 5.8%, revenue dropped 3.6% due to rising franchise contributions. New home sales tumbled 13.7%, dragging sector revenue down 14.1%.

With profitability challenges persisting, KE Holdings' restructuring appears set to continue as it balances cost reductions with strategic investments in emerging businesses.