Big Tech China sees a new wave of job cuts

According to unnamed sources South China Morning Post and other local media interviews, layoffs are taking place in various departments in Tencent and Alibaba. Weekend report from Thepaper.cn also shows that social media giant Tencent is laying off around 100 employees from sports channel.

Staff reductions are happening at various departments at Tencent and Alibaba Bloomberg

The size of job cuts varies across departments, depending on profitability and the nature of the business. The heavy loss businesses, which include cloud computing and video, have been the hardest hit at Tencent, which has suffered at least two job cuts since April 2022. According to a source, there was a case where the entire team of more than 20 employees was laid off. Tencent did not immediately respond to a request for comment, but Chief Executive Officer Pony Ma Huateng said on May 18 that the company would correct some business divisions that were not performing well, after reporting sluggish revenue growth in the first quarter. first.

Meanwhile, in the case of e-commerce giant Alibaba, instead of reducing staff in one go, the company will lay off employees in multiple cuts. This will affect entities including DingTalk, Alibaba Cloud, Taobao and Taobao Deals, as reported by the company. Economics Weekly.

Chinese tech companies are often reluctant to formally acknowledge job cuts, in part because the country’s labor law requires labor authorities to consult and intervene with unions if the cuts are to be made. reduced personnel related to more than 20 jobs. This wave of cuts is said to be deeper than previous ones, taking place amid uncertainty in China’s technology sector regulation and the economy being hurt by the strict Covid-19 lockdown.

Media page Caixin As quoted by Peking University professor Lu Feng, the unemployment rate in April 2022 for 16- to 24-year-olds in China was 18.2%, higher than 13.9% in Europe and 8 .6% in the US. According to Lu’s research, the youth unemployment rate in China has been increasing since the middle of last year, while the unemployment rate in the US and Europe is gradually decreasing.

Several other Chinese tech companies are also adjusting to improve their business. Xiaohongshu, China’s Instagram-like social e-commerce platform, last month said it was laying off 9% of its staff. Meanwhile, Bilibili video streaming platform CEO Chen Rui said that the company will capitalize on spending every penny.

To spur the tech sector back to growth, the Beijing government appears to be easing its scrutiny of the industry. The Chinese People’s Political Consultative Conference, the country’s top political think tank, held a special symposium on May 17 with leaders of major technology companies, to promote digital economy, sending a signal in favor of an industry that has experienced a turbulent 18 months.