Meituan begins job cuts to lower costs: report · TechNode

Meituan is in the midst of job cuts that will affect nearly every business unit at the food delivery and life services giant, Chinese local media Caixin reported on April 9. Meanwhile, the company is hiring simultaneously for new positions created by “business adjustment,” the story said.

Why it matters: Meituan becomes the latest Chinese tech major to begin large-scale layoffs. Facing the twin headwinds of a cooling economy and regulatory pressures, Chinese tech giants are replacing higher-income veteran employees with cheaper and less-experienced new hands to lower operation costs.

Details: Meituan’s layoff will affect all sectors, including the company’s core food delivery and hotel booking businesses, the report says. Grocery delivery services Meituan Select and Meituan Maicai and enterprise-facing food distribution arm Kuailv face the deepest cuts of up to 20%, Caixin reported, citing unnamed sources with knowledge of the matter.

  • Meituan’s current round of layoffs started on April 8. The company aimed to do it in “low-profile and quick,” Meituan’s employee told the Chinese media outlet. Laid-off workers’ lost access to the company’s internal communication tool within hours of their termination, the report cited an unnamed employee. The layoff is expected to last until the end of this month.
  • Meanwhile, the company has posted nearly 700 job openings since April 8, mainly for positions in Meituan Select, Meituan Maicai, Instashopping, and its autonomous vehicle delivery department. Since March, the company has posted more than 2,000 positions, equal to the total number of new positions opened at the firm in the past three years.
  • The Cyberspace Administration of China (CAC) recently talked to 12  major tech names, including Tencent, Alibaba, Meituan, Pinduoduo, and JD, about workforce levels in response to recent layoff news. Between July 2021 and mid-March this year, 216,800 workers left the 12 companies, while 295,900 new staff joined, representing a net increase of 79,100, the regulator said. Tech majors told the regulator that their staffing is “generally stable” considering the relatively high employee turnover in the tech sector.
  • Meituan has recorded a net increase of 17,000 employees since July last year and has pledged to recruit more fresh graduates this year, according to the CAC’s statement.

Context: Amid increasing tech layoffs, Chinese internet majors created a euphemism for firing workers. Companies such as JD and Bilibili now congratulate employees on losing their jobs by sharing cheery notes titled “graduation notice” from human resources departments, prompting widespread complaints on Chinese social media platforms.

  • Meituan’s expenditure on staffing increased 61.4% year-on-year to RMB 34.8 billion ($5.5 billion) in 2021, representing the company’s second-highest cost after delivery fleet expenses.

Emma Lee is Shanghai-based tech writer, covering startups and tech happenings in China and Asia in general. We are looking for stories related to tech and China. Reach her at [email protected].
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