What’s new: Six of China’s 10 biggest internet companies including Alibaba Group and Tencent Holdings slashed workforces in 2022 to counter business headwinds, a recent survey found.
The China Academy of Information and Communications Technology’s survey examined employment at China’s 10 most valuable internet companies and found that four of them — PDD Holdings, JD.com Inc., East Money Information Co. Ltd. and Beijing Kingsoft Office Software Inc. — continued workforce expansion last year. Industrywide, the total employment grew over the past three years, the survey showed.
Tencent, the biggest company by market value, slashed its workforce by 10.1% in 2022, letting go 6,898 people. That compared with the company’s 32.9% expansion in 2021. Meituan, which added 44.6% employees in 2021, reduced the workforce by 8.1% in 2022, while Alibaba laid off 19,725 people in 2022, the survey showed.
The context: Companies slashed payrolls to control costs in response to slowing business amid the pandemic and tougher regulatory environment.
Quarterly revenue growth of Alibaba, which was fined a record 18.2 billion yuan ($2.8 billion) in 2021 by the market watchdog, plunged below 10% since the third quarter of 2021 from 30% previously. Tencent recorded a 15% decline in profit before tax in 2022, the first annual drop in nearly 10 years. Meituan reported two consecutive annual losses since 2021.
Most industry leaders significantly reduced the hiring of new graduates. Meituan and ByteDance nearly halved their hiring last year.
Slowing recruitment by the internet industry is adding more pressures to China’s job market as the country’s youth unemployment hit a record 21.3% in June.
Contact reporter Han Wei (weihan@caixin.com) and editor Bob Simison (bob.simison@caixin.com)
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