China’s tech majors are hoping to be leaner and meaner · TechNode
China is on holiday for the Lunar New Year, or Spring Festival, for the week of Jan. 31-Feb. 6. TechNode has a number of our previous reports on the widespread layoffs and cutbacks that have recently taken place across a range of Chinese tech sectors and have included major Chinese tech companies, from Alibaba and ByteDance to Kuaishou.
Since late 2021, China’s tech industry has entered an adjustment phase. Many tech majors are cutting back in some areas while doubling down on others, responding to China’s slowing economy and tightening regulations. Companies have called the strategy “qufei zengshou” (“cutting the fat and strengthening the weaknesses”).
From e-commerce giant Alibaba to content tech leaders ByteDance and Kuaishou, companies are rejigging business units, scaling back loss-making teams, and cutting offerings that no longer comply with a raft of new regulations. At the same time, they are implementing shorter working hours and better work benefits to appease both the regulators and public outcry over the industry’s infamous overwork culture. See below for a curated list of relevant reporting from TechNode:
Alibaba and Ant Group
Alibaba reshuffles local lifestyle businesses
Yu Yongfu, the newly appointed CEO of Alibaba’s Local Life department, geared up for a major organizational reshuffle in November, local media LatePost reported. Yu planned to reorganize the local life services sector of the company – which includes travel service Fliggy, delivery platform Ele.me, and map app AutoNavi – into ten business units, including five consumer-facing business units, four enterprise-facing segments, and one infrastructure service unit for logistic support. Yu, the former head of Alibaba’s entertainment arm, was appointed as chief executive officer of Alibaba’s local service department at the start of the month. Alibaba’s move came on the heels of organizational adjustments made by ByteDance and Meituan.
Alibaba appoints new CFO and restructures business units
Alibaba announced on Dec. 6 that deputy chief financial officer Toby Xu will replace Maggie Wu as the company’s chief financial officer next April. Separately, the company said it will create two new units for domestic e-commerce business and international e-commerce business. Trudy Dai will lead the domestic unit, and Jiang Fan will head the global one. The Chinese e-commerce giant is overhauling its business structure at a time of increasing regulatory pressure and rising competition.
Alibaba expands employee benefits as China looking to improve working conditions
Chinese tech giant Alibaba announced an employee benefit program on Dec. 14 in response to Beijing’s call to improve working conditions. The program offers a range of benefits, including an extra one-week accompanying leave for family visits, an additional 10-day parental leave, a 20-day paid vacation for employees who have worked in the company for more than 10 years, plus extra subsidies for transportation and team outings. The company also adopted a more flexible work schedule, allowing employees to work outside of the office one day per week.
Ant Group shuts mutual aid fund Xianghubao
Alibaba’s financial affiliate Ant Group shuttered Xianghubao, the world’s largest mutual aid fund, on Jan. 28 amid Beijing’s regulatory crackdown on financial services. The four-year-old fund claimed more than 100 million registered users and said it had aided 180,000 people in need over three years. The move was one of a series of blows to the extensive business interests of Ant Group after regulators halted its planned mega IPO in November 2020.
ByteDance started shorter working hours of ‘1075’
TikTok parent company ByteDance started to implement a lighter work schedule called “1075,” working from 10 a.m. to 7 p.m. five days a week, according to an internal document at the beginning of November. The new schedule was a departure from the Chinese tech sector’s infamously grueling work schedule of “996″ (working from 9 a.m. to 9 p.m. six days a week). ByteDance asked staff to seek permission at least one day in advance to work beyond the new hours. The move meant ByteDance became one of the first Chinese tech companies to mandate shorter hours.
ByteDance to reorganize businesses into six new units
ByteDance hatched plans to regroup its main businesses into six new business units, according to an internal memo that was made public at the start of November. News aggregator Toutiao, Xigua Video, and search engine Baike were merged with Douyin, the Chinese version of TikTok, as part of the move. Dali Education, the company’s edtech unit which was hurt by the country’s online tutoring crackdown, was reassigned to oversee vocational learning services and employee development. Zhou Shouzi, chief executive officer at TikTok, stepped down as ByteDance’s chief financial officer to focus on his duties at the short video app.
ByteDance begins another round of edtech layoffs: source
ByteDance laid off more than 1,000 staff from its edtech businesses following the deep cuts it made in the sector in August. The new round was concentrated in the K-9 education units, a person with knowledge of the matter told TechNode. The person declined to be identified.
TikTok owner ByteDance became the latest Chinese tech giant to retreat from online tutoring services targeting students up to grade nine, or K-9, due to China’s crackdown on private tutoring services in late July.
ByteDance cuts talent development center and scales back HR department
Another week, another reported round of job cuts. ByteDance planned to lay off its talent development center, according to an internal statement revealed by local media on Dec. 15. The employees were set to be transferred to other departments if they find suitable roles. The rest were to be laid off with compensation. The center was part of the company’s human resource department. ByteDance said in the statement that the talent center was disconnected from the company’s demands. The tech giant also hinted at further downsizing of its human resource department in the future.
ByteDance cuts nearly 100 jobs in investment unit: report
A month later and the Chinese tech giant laid off nearly 100 employees in its strategic investment unit, Chinese media outlet Tech Planet reported on Jan. 19, citing several sources with knowledge of the matter. Team lead Zhao Pengyuan was transferred to the office of the company’s president together with four other members of the senior management team, according to the report. A ByteDance representative confirmed the “ongoing adjustment” of the investment team, but sought to portray it as a normal annual reshuffle to “strengthen business focus” and “reduce investments in businesses that have low synergies with other lines of service.” The company said at the time that some details regarding the changes were still under discussion, adding that it planned to transfer the employees in the investment team to other departments.
Kuaishou starts a new round of layoffs: report
Chinese short video platform Kuaishou started a new round of layoffs, Chinese media The Paper reported on Dec. 8. Mid-level managers and low-performing employees were likely to be cut, according to the report. It was unclear how many people were due to be affected, but Kuaishou staff posted on China’s business social platform Maimai that the company was set to cut 10% to 30% of its employees. Kuaishou’s downsizing followed layoff moves from ByteDance and iQiyi.
Kuaishou slashes employee benefits after layoff reports
The layoff reports were followed in Chinese media by news of cuts to employee perks to limit internal spending. The company narrowed down housing subsidies, only offering employees less than three years of support. It also canceled free meals and afternoon tea breaks for 2022. However, the company did expand maternity benefits, pledging to offer maternity allowance up to RMB 3,000 ($470) to employees.
Kuaishou reportedly making major jobs cuts across its key teams
On Jan. 4, The Paper again reported that Kuaishou was in the midst of a wide-ranging layoff across all major teams, citing unnamed employees at the short video platform. The cuts, which reportedly began in 2021, affected the company’s main units, including e-commerce, algorithms, globalization, commercialization, and gaming. Kuaishou’s e-commerce team planned to cut 10-15% of positions, the algorithm recommendation group 30%, and the globalization team 25%, the sources told The Paper. Reports in early December had stated that Kuaishou was laying off people in the commercialization department.
Tencent, Baidu, and beyond
Tencent’s employee retirement package sparks envy online
Tencent released an employee retirement benefits plan in early November, prompting widespread discussion online over its generosity. The company claimed to offer long-term health insurance to employees who have worked for more than five years, which remains in effect even after staff leave the company. When employees have worked at Tencent for more than 15 years, they can retire early by receiving a bonus package or continue to work at the company. The retirement package includes lifetime health insurance, a six-month salary, and a choice between 50% of locked stock options or bonuses based on years of service.
“China’s Netflix” iQiyi poised for massive job cuts
Chinese video platform iQiyi reportedly planned to lay off 20-40% of its workforce as the Netflix-like firm tried to reduce costs amid increasing losses. The company had 7,721 employees in 2020. That means the layoff could have wiped out some 1,500-3,000 positions. Referred to as the largest round of job cuts in the company’s history by local media, the layoff was reportedly set to affect a range of business units such as content, gaming, and smart hardware. Middle-level management and senior employees were likely to be at the center of the storm according to reports.
Baidu reportedly lay off staff at mobile business arm
Chinese search giant Baidu started a layoff at its mobile ecosystem group, which oversees its search and mobile businesses, several Chinese media outlets reported on Dec. 24, citing different sources. It was unclear at the time how widespread the layoff was, though several media outlets reported that the job cuts affected various business lines, from gaming to livestreaming to education. The Paper first reported the news on the night of Dec. 23 before retracting its story. Jiemian News reported the layoff was part of a “small-scale adjustment,” citing unnamed sources. Sina News reported the layoff was large-scale and included a cut of 300 people in the gaming department. The last two reports are still available at the time of publication.
Dingdong Maicai plans massive job cuts: report
Chinese online grocer Dingdong Maicai planned sweeping job cuts affecting several business units of the company in mid-January, according to Chinese media outlet Sina Tech. The reported workforce cuts were set to impact different departments, with the procurement team facing the largest reduction in the number of posts to just 50% of its current workforce, followed by a 30% cut for the algorithm unit, 30% for the operations team, and 10-20% for the firm’s recruitment arm. Dingdong’s headcount had already shrunk by around 10,000 compared with its peak, the report cited an employee of the company as saying. The Beijing-based firm recorded a RMB 2.01 billion ($320 million) net loss in the third quarter of last year, more than doubling its RMB 828.6 million net loss over the same period of 2020.
Chinese restaurant supplier Meicai cuts 40% more jobs ahead of Hong Kong IPO: report
Meicai, a Chinese app that supplies farm-to-table produce for restaurants, started a new round of layoffs affecting around 40% of the company’s workforce, Chinese media outlet iFeng reported on Jan. 12. The reported job cuts came just five months after a previous round of redundancies in September when the company cut at least half of its employees across several teams. The latest adjustment was reportedly in preparation for a Hong Kong IPO aimed at raising $300-500 million in the first half of this year. The Beijing-based company shelved a US IPO plan last July as Beijing tightened restrictions on overseas listings for Chinese firms.
Youzan, a Chinese e-commerce service provider, starts mass layoffs after doubling losses: report
Youzan, one of China’s largest e-commerce service companies, reportedly planned to lay off 1,500 people, or nearly 30% of its employees in early 2022. Youzan, which develops software helping merchants to sell products on various Chinese online platforms, had faced substantial challenges as one of its major clients, social video giant Kuaishou, developed its own software services as it aimed to rake in more profit from the booming livestream retail sector.