China denies massive layoffs among internet firms

Since the fourth quarter of 2018, many Chinese reports have suggested that major internet firms in the country are either scaling back or freezing hiring, or axing staff due to lukewarm growth and unfavourable prospects.
Written by Cyrus Lee, Contributor

China's top economic planner on Tuesday rebutted reports in recent months that suggest there have been massive layoffs among many local internet companies.

The recruitment and employment among China's internet firms are generally stable, without the phenomenon of mass layoffs, the National Development and Reform Commission (NRDC) said Tuesday.

The conclusion is made through various research conducted by the government department, including discussions with companies and researchers in the relevant industries, NRDC said.

The NRDC also said the number of newly-created jobs in urban areas reached a historical high of 13.61 million in 2018, representing the sixth consecutive year of China creating more than 13 million jobs in urban areas. Nevertheless, the government department acknowledged the external environment is complex and the Chinese economy is facing downward pressure, while the increasing number of college graduates is also putting pressure on the overall employment environment.

The response from the government department is directed at reports that have recently circulated around China, stating that many Chinese internet firms have cooled off, including top-tier tech startups and unicorns like Qunar and Zhihu, and have allegedly started laying off staff since the end of 2018 due to lacklustre growth and an unsteady economic environment. 

Although most of these internet companies interviewed by the media deny massive layoffs, attributing the lowered headcounts to business optimisation and staff restructuring, some industry insiders have confirmed that significant layoffs have occurred, according to the state-backed Global Times report in late December.

Meanwhile, local reports have suggested that Chinese technology giants like Huawei, Alibaba, and JD.com have also been releasing internal letters over the past few months to scale back on hiring. 

Research data from a local recruiting site showed that the number of job hires on the platform for the IT and internet industry has decreased by 6 percent quarter-on-quarter in the second quarter of 2018, the first declines in hiring demand seen in years.

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