China’s Big Tech sees new wave of job cuts as Covid lockdown hurts economy

A new wave of job cuts has hit China’s biggest technology companies, as regulatory pressure and the COVID lockdown hit their business.

It is not yet clear how much of those firms’ workforce will be affected as few are willing to publicly disclose their plans, but according to local media, there have been widespread reports of job cuts across a broad spectrum of job functions in the sector. I have come Sources interviewed south china morning post,

Video gaming and social media giant Tencent Holdings is laying off around 100 people from its sports channels. Thepaper.cn Reported on Friday. The Chinese news website cited an insider at the Shenzhen-based company, who said several departments were slashing staff.

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A source explained that the scale of job cuts varies from team to team depending on their profitability and the nature of the business. Post,

Another source said businesses with heavy losses, including cloud computing and video, were hit hardest at Tencent, which has faced job cuts at least twice since April.

According to a third source, sometimes, entire teams of more than 20 employees were laid off. All sources declined to be named as they were not authorized to speak to the media.

Tencent did not respond to a request for comment, but founder and chief executive Pony Ma Huateng said in an earnings call with analysts on Wednesday that the company would accommodate some non-core businesses after reporting steady revenue growth in the first quarter.

Tencent President Martin Lau Chi-ping said in March that the company would exit or streamline some non-core businesses to control headcount, but the total number of employees by the end of this year is still higher than in 2021. will be even higher.

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E-commerce giant Alibaba Group Holding, the owner of this newspaper, is also being said to cut jobs. Instead of reducing staff in a one-time exercise, the company is letting employees go through multiple rounds of job cuts, which will impact units including DingTalk, Alibaba Cloud, Taobao and Taobao Deal. economics weekly Reports citing unnamed company sources.

Alibaba did not respond to a request for comment.

The mascot for Alibaba’s Taobao e-commerce platform near the company’s headquarters in Hangzhou, China. Photo: Bloomberg alt=The mascot of Alibaba’s Taobao e-commerce platform near the company’s headquarters in Hangzhou, China. Photo: Bloomberg>

Chinese tech firms are generally reluctant to officially cut jobs, partly because the country’s labor law calls for a trade union consultation and intervention by labor officials if the staff shortage involves more than 20 jobs.

Regulatory uncertainty in China’s tech sector and tighter COVID containment measures have cut deep into a slowing economy, which has hit Big Tech’s earnings.

According to Chinese media, in April, the unemployment rate for people between the ages of 16 and 24 in China was 18.2 percent, compared to 13.9 percent in Europe and 8.6 percent in the US. CaixinQuoting Lu Feng, a professor at the National School of Development at Peking University, at a seminar last week.

According to Lu’s research, the youth unemployment rate in China has been rising since the middle of last year, while the unemployment rate in the US and Europe has been steadily declining.

According to Lu’s research, the youth unemployment rate in China has been rising since last October, while the unemployment rate in the US and Europe has been steadily declining since the middle of last year.

Some Chinese tech companies said they were making adjustments to improve their business.

Xiaohongshu, a Chinese social e-commerce platform like Instagram, said last month that it was laying off 9 percent of its employees due to poor performance.

Chen Rui, chief executive officer of video-streaming platform Bilibili, said in March that the company aims to “put more of every dollar we spend.” That same month, executives from China’s second most popular short video platform Kuaishou said in a conference call that the firm wanted to break even this year.

To give the tech sector a lift, the Chinese government is easing its scrutiny on the industry. On Tuesday, the Chinese People’s Political Consultative Conference, the country’s top political advisory body, held a special symposium with Big Tech leaders on promoting the digital economy, sending a gesture of support to the industry that has been around for 18 months. has passed through the cracks.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please visit the SCMP app or visit SCMP’s Facebook and Page. Copyright © 2022 South China Morning Post Publishers Ltd. All rights reserved.

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