Translated by:  MOS Translation Team – Beyond X

Picture Source: Reuters

It was reported on May 13, 2022, tens of thousands of tech workers were fired amid a regulatory crackdown and the overextended expansion of the industry.

Zhang Wei’s supervisor solely confirmed the news only after the cuts on the Beijing-headquartered company last December was leaked to the media.

“Although I knew in advance, I still could not believe it.” said Zhang, who asked to use the pseudonym. 

Zhang is just one of the tens of thousands of workers in Communist China’s tech scene who’ve been laid off following Beijing’s stock price-hammering and regulatory crackdown on private enterprise. Some Analysts also say years of aggressive expansion throughout the sector left some companies overstretched.

Almost 73,000 staff have been let go between July and mid-April, based on analysis by TechNode, a media outlet that covers China’s technology and startup scene. Later in April, lifestyle app Xiaohongshu(usually described as China’s version of Instagram), fired about 10 % of its employees.

 “The causes of not only these layoffs, but the frozen headcount in lots of divisions, terminated present hiring and paused internships, are a combination of poor macroeconomic outlook, strain to focus on profits and cut out unprofitable businesses, and higher regulatory oversight within the sector,”Rui Ma, an angel investor and founder of the Tech Buzz China podcast, told Al Jazeera.

The worse may be yet to come. 

Reuters’ report revealed in March, citing anonymous sources close to the companies, Alibaba and Tencent, the 2 internet titans of Communist China’s, are planning to let go of tens of thousands of staff combined in this year.

Alibaba and Tencent about to let go of tens of thousands of employees
Picture Source: Thomas Peter/Reuters

Mr. Gao, co-founder of Beta, a headhunting firm that has collaborated with Communist China’s main tech companies, said many tech firms had overstretched themselves by trying to “duplicate their business models” in new industries, pointing to Meituan and e-commerce platform Jindong’s foray into groceries as examples.

“These measures are too aggressive to make money, leaving companies with few choices other than to cut the departments not generating profits,” Gao told Al Jazeera.

Gao added, certified tech candidates are discovering that it is increasing difficult to get job interviews as corporations advertise fewer and fewer openings. 

For tech workers like Zhang, the sector’s turbulence has come as a wake-up call.

Source:
https://gnewsapp.com/post/p2535081/

Edited and posted by: Maverick (Janibek L.)

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