Huge workforce reduction plan of Chinese giants

Alibaba, China’s largest e-commerce company, is expected to lay off about 39,000 employees, accounting for 15% of the group’s total workforce.

In addition, Tencent Holdings, the giant that owns the Chinese messaging application platform WeChat, also announced that it will cut staff at some of its business units. In particular, the unit that oversees business activities including video streaming and search will have its workforce cut by 10% -15%.

If these reports are true, the downsizing of the two mainland giants will become their first major layoffs since regulators launched an unprecedented campaign in 2020. , to control the tech giants in this country.

Tough domestic regulations and the economic impact of the COVID-19 pandemic have slowed sales growth for most companies, disrupted their share prices and made raising new capital difficult. and business expansion is much more difficult in China, forcing the two companies to find ways to cut costs.

Alibaba fell into a local crisis

In fact, Alibaba began to reduce staff in February. The leaders in some departments have made specific plans to lay off employees, at this time, many units also began to implement the plan. reduce manpower.

Another information said that the company’s Ele.me service segment also plans to lay off up to 25% of the staff. Besides, video streaming platform Youku is also planning to lay off some content developers.

In February, Alibaba reported its slowest quarterly revenue growth since going public in 2014, a drop in sales in its core business segment that dragged the company’s stock down more than 60 percent. % since the beginning of last year.

Alibaba CEO, billionaire Jack Ma publicly criticized China’s management system, causing bad effects on the company, including a $ 2.8 billion fine for monopoly. Then came a series of strict regulations, causing Ant Group, an e-payment company backed by Alibaba, to be suspended from IPO before going public.

Statistics in 2021 show that Alibaba’s total workforce reaches 251,462 employees, if this dark event happens, this may be the time when Alibaba will end its golden age. Currently, Alibaba Cloud has not yet announced that it will lay off employees. This will probably be the unit that still retains human resources after the mandatory “purification” of this big man.

Tencent kicks off growth ‘winter’ campaign

For Tencent Holding, the layoff plan is set to start from less profitable businesses like Tencent Video and Tencent Cloud. During an internal meeting at Tencent in late 2021, chief executive Pony Ma revealed to employees that the company should prepare for a “winter” of growth. This raised concerns about a bleak future for some employees.

According to an interim report for 2021, Tencent had 94,182 employees in June last year, significantly more than 70,756 a year earlier.

Not stopping there, China’s largest ride-hailing company, Didi Global is also planning to reduce its total number of employees by 15% as its domestic business is affected by regulations from the government. government. Previously, this business had been targeted by the government due to network security issues.

Up to now, all three giants Alibaba, Tencent and Didi have yet to answer to the media on this issue.

Thai Hoang(synthetic)