
Earlier this month, a Weibo user took to the Chinese social media platform to vent about challenges in the tech industry. “It’s hard to not to be depressed, to be honest,” she wrote, adding the hashtags “#Alibaba layoffs #Tencent layoffs.”
In the comments section, users encouraged her to cheer up, but in response she wrote, “The current environment is too unfriendly to graduates, schools are closed, and it is so difficult to find a job.”
The user’s posts offer a taste of the current level of morale in parts of the Chinese tech industry, following a spate of layoffs at some of the country’s most successful companies. The likes of Tencent, Bytedance and Didi, which have been rapidly expanding this century, have all had to slash staff over the last year or plan to do so. One analysis done by TechNode, a Chinese tech publication, showed that at least 72,779 workers at major Chinese tech firms have been laid off since last July.
As they deal with the aftermath of the regulatory crackdown alongside a poor macroeconomic environment, big tech companies are cutting their operating costs. And while these layoffs will not significantly impact China’s overall unemployment level, they do illustrate wavering growth among the once-booming internet giants.
“It is a perfect storm of regulation and macroeconomic deterioration,” says Michael Norris, a Shanghai-based analyst for AgencyChina, a business consultancy. “That has put pressure on the ecosystem, and then they have decided to trim the fat”
Alibaba, for example, is preparing to axe up to 39,000 workers, according to recent Reuters reporting. The company’s stock has fallen over 50 percent since last summer, while its revenue grew at its lowest rate since the company went public eight years ago in the last quarter of 2021. Tencent and Didi — which was taken off Chinese app stores after a cybersecurity investigation into the company last year — also have plans to make job cuts this year.
Alibaba, ByteDance, and Didi did not respond to requests for comment. In a recent Tencent earnings call, Martin Lau, the company’s president, said its overall headcount would still be higher by the end of this year although there would be “a rationalization of some of [Tencent’s] non-core and underperforming businesses.”
Beyond the biggest tech companies, analysts say that certain industries have been particularly hard hit, such as for-profit edtech — which was effectively banned last year — and online gaming, on which the government put strict curbs last summer. New Oriental, for example, once China’s largest private education provider, had to lay off 60,000 workers last year.
The slowing Chinese economy has also played a significant role. In March, Premier Li Keqiang announced a growth target of about 5.5 percent this year, the slowest rate in more than twenty years. The recent Covid-19 lockdowns in places like Shanghai and Jilin province have only added to the overall economic slump.
Layoffs have hit the Chinese tech sector before, and Chinese tech companies periodically fire the lowest performers on their staff. But Bo Zhuang, an economic analyst at the investment firm Loomis Sayles & Co., says the scale of recent cuts is not routine. “These are far, far bigger than any downsizing we have seen,” he says. “If you look at the top companies — Tencent, Alibaba, Bytedance — they have been gaining market share, and they have never really had these big layoffs.”
The job losses in the tech sector have come at a time of rising unemployment in China, with the overall jobless rate now at 5.8 percent, up from 4.9 percent six months ago, according to official statistics. Youth unemployment, defined as people aged from 16 to 24 years old, stands at 16 percent. Such figures are causing concern among the top echelons of the Communist Party, which has long placed a premium on ensuring economic growth is rapid enough to provide for high employment levels among China’s vast population.
The recent layoffs at big tech firms alone will not meaningfully impact China’s unemployment rate, while the affected workers are predominately highly skilled and educated, potentially making it easier for them to secure another job. In 2021, the software and information technology sector employed 8.1 million people in China, according to the Ministry of Industry and Information Technology, accounting for around 1 percent of the labor force. “The sectors — even though they are big in terms of foreign investors — in the general scheme of the economy, are not that big,” says Rui Ma, a China tech analyst and creator of Tech Buzz China podcast.
Still, the layoffs indicate that tech behemoths like Tencent and Alibaba may no longer be a reliable source of employment growth, as these companies face an increasingly saturated market and a less favorable regulatory environment. China’s internet regulator has attempted to assuage concerns about the recent layoffs, announcing earlier this April that staffing in the tech sector overall was stable.
[E]very internet platform will eventually hit a growth ceiling. And that’s where China’s biggest platforms are today.
Bao Linghao, a Shanghai-based analyst for Trivium China
“We need to zoom out and look at the trajectory of their life cycles. The big internet platforms have been growing at a staggering rate,” says Bao Linghao, a Shanghai-based analyst for Trivium China. “So they had to hire as many people as possible to keep up with the growth. But the number of Chinese internet users is not growing. So every internet platform will eventually hit a growth ceiling. And that’s where China’s biggest platforms are today.” As of 2021, the internet penetration rate in China was 71 percent, according to the China Internet Network Information Center, leaving limited space for further growth.
The news of mass layoffs may cause a rethink among young Chinese people looking for their first job, like the Weibo user worrying about his post-graduation options. One possibility is that jobseekers will look more to parts of the tech sector such as chipmaking, where Beijing has been trying to promote homegrown companies.
“Top graduates might look for other opportunities,” says Loomis Sayles’ Bo. “Previously, if you studied physics, you would go work for TikTok. Now, maybe you should go work for Semiconductor Manufacturing International Corporation (SMIC) or some other hard tech company. It changes the labor force.”
Whether or not industries that the government is trying to support — like semiconductors and quantum computing — will be able to pick up the employment slack from more consumer-oriented internet companies like Tencent remains to be seen.
Hiring in the semiconductor industry has surged, according to data from 51job.com, a Chinese recruitment platform. Semiconductor companies are hiring the most graduates in 2022 thus far, among 15 industries surveyed, up from the fourth largest hiring industry in 2020. E-commerce company hiring, on the other hand, is down by 11 percent compared to 2021. Meanwhile, in 2021, a record 2.1 million college graduates took the civil service exam — likely persuaded by the stability of government jobs in comparison to the volatile private sector.
Still, such data are unlikely to do much to cheer those already working at some of China’s most well-known firms. Hong Yu Liu, a researcher at Cambridge who has conducted ethnographic research at big Chinese tech companies, says the workers he spoke to in 2020 were optimistic as they felt their “financial prospects were good.” Now, he says, “the overall atmosphere is pessimistic.”

Katrina Northrop is a journalist based in Washington D.C. Her work has been published in The New York Times, The Atlantic, The Providence Journal, and SupChina. @NorthropKatrina