China Internet Industry Insights 2021

For those working in the internet industry in China, 2021 has been an eventful year. People laugh and people cry. In December, their social networks were inundated with two explosive news: the massive layoffs within China’s Big Tech and the improvement in employee well-being, which can be interpreted as the two snapshots of the Chinese internet industry.

As 2021 draws to a close, a new round of layoffs shakes up Chinese big tech companies. On December 14, a leaked memo from ByteDance, a Chinese tech giant and parent company of social media platform TikTok, was posted on Weibo, “Chinese Twitter.” According to the memo, the company will lay off its talent training team and further streamline the human resources department, citing that the team has failed to train competent employees. At the time of posting, ByteDance has not responded to a request for comment.

This is not the company’s first cut. A few months earlier, the company launched a massive layoff that saw underperforming employees being removed from the marketing, games and education teams. ByteDance’s multiple rounds of job cuts stand in stark contrast to those a year ago, when it expanded its business and its thirst for new talent seemed insatiable.

In the same month, iQiyi, a video streaming platform owned by Baidu, reportedly cut up to 40% of its workforce in the more expensive departments, including those working with games, products and the video community. , and his layoffs could continue. until the Chinese Lunar New Year, which falls on February 1, 2022. Short video giant Kuaishou has also started to shed underperformers in its overseas marketing and business team. Some Kuaishou employees announced on social media that the company’s layoff rate is expected to reach 30 percent.

While it’s common for the tech company to fire the underperforming at the end of the year, the job cuts seem larger than usual this time around. Massive layoffs by Chinese tech giants are seen as a sign of dwindling job prospects in the country’s internet industry, which now faces sweeping regulations.

“It really caused panic among us. First, they removed the teaching teams, and now it is the HR teams. Nobody knows who will be next, ”said an internet industry source who declined to be named because she is not authorized to speak to the media.

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According to a person familiar with the matter, the series of job cuts at Chinese tech companies reflect the slowdown in China’s internet industry. Tech companies have been hit hard by regulatory headwinds, intensifying competition and pressures on cash flow, with most tech giants facing slow core business growth and losing momentum. land on the stock market. In July of this year, the Chinese internet giants wiped out a combined $ 823 billion since their peaks in February.

“The tech giants have strived to expand their scope in recent years. In the near future, most of their new trades are not only unprofitable but also expensive. When businesses face the downturn, they would spontaneously reduce their costs to survive, which means they have to cancel these superfluous lines of business, ”the source said, saying it is an inevitable trend that Chinese internet companies have been and will continue to downsize in the midst of a sluggish economy.

While some pack their bags, others rejoice in the improved well-being of their employees. On December 14, when ByteDance announced its latest wave of layoffs, Chinese e-commerce giant Alibaba launched an employee welfare program offering a range of benefits, including an additional one-week paid leave for family visits. , 10-day parental leave for employees with children under three, and subsidies for transportation and team outings. The company has also adopted a more flexible work schedule whereby employees can choose to work from home one day per week. After the program was announced, Alibaba received a lot of positive feedback, with many netizens calling for their own businesses to follow suit. Chinese state-owned media China Daily said Alibaba’s latest program reflects “advanced and up-to-date human resources strategy in the digital age.”

Alibaba’s latest employee program is the latest example of the tech giant’s response to the country’s call to improve the work environment. Following a wave of employee deaths at Chinese tech companies, the Supreme Court ruled in late August the infamous “work culture 996”, in which people work from 9:00 a.m. to 9:00 p.m. six days a week. The announcement was welcomed by tech workers who have complained about grueling hours for years, and many have called for a stricter policy to ensure tech companies follow labor laws.

The harsh recall by Chinese authorities has, to some extent, discouraged the notorious “996 culture” – tech giants, willingly or not, have started to shorten their working hours. In the past few months, a unit at the Meituan and Kuaishou Food Delivery Platform was among several companies that canceled a system known as a “big week, little week,” whereby staff are not. allowed only one whole weekend every two weeks.

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ByteDance canceled compulsory labor every other Sunday in August. Three months later, the company implemented new rules that officially discourage employees from working more than nine hours a day or commuting to the office on weekends.

According to a source familiar with the matter, more and more tech companies will continue to counter the notorious labor system targeted by the country’s policy, “companies must show that they are taking action on this matter, and if not. do not, they risk being taken as an example by the authorities, ”the source said.

Despite the public and government reaction to the grueling work culture in the tech industry and calls for a work-life balance, change is clearly slow to come. According to the open-access spreadsheet created by the “Worker Lives Matter” campaign, employees at Tencent, Alibaba, ByteDance, and Meituan typically still work from 10:00 am to 9:00 pm At the same time, their counterparts at JD. com and Huawei are struggling even longer, from 9 a.m. to 9 p.m.

“It’s positive to see the tech giants trying to improve the working lives of their employees. However, they still have a long way to go to achieve a work-life balance, ”the source said.

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