Chinese IT companies have resorted to layoffs amid local government pressure on the tech sector. For example, the video service iQiyi Inc. plans to lay off hundreds of employees from some departments - this is about 20% of all staff, according to the portal Caixin Global, citing several service workers.
IQiyi Inc. employees told the portal that in the least profitable departments, reductions will reach 40%. Such measures of the company imply that the management decided to drastically change the strategy, which previously assumed profit from expansion.
Downsizing has also begun at Kuaishou Technology, which is developing a short video service similar to TikTok. According to the website The Paper, its employees said that by the end of the year, management will make changes in offices in Beijing, Shanghai, Guangzhou and Shenzhen.
Layoffs in Chinese companies ahead of New Year are common, but the South China Morning Post notes that they are larger this year. At the same time, one should not associate the cuts solely with the pressure of the authorities on the sector - they are caused, among other things, by increased competition, the newspaper writes.
South China Morning Post sources claim that Kuaishou is laying off the most underperforming employees by offering them a monthly salary and a seniority bonus. At the same time, layoffs began from managers with high salaries.
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