- JD.com has begun laying off 10 to 15% of its staff, according to Chinese media.
- Alibaba and Tencent are also planning to cut at least 10% of their staff this year, Reuters reported.
- The cuts come as China’s tech giants grapple with Beijing’s crackdown on the sector.
Chinese e-commerce giant JD.com has reportedly begun laying off at least 400 employees amid reports that its competitors – Alibaba, and text-messaging and gaming giant Tencent – are similarly planning to cut at least 10% of their headcounts.
The layoffs come as Chinese tech companies grapple with regulatory crackdowns and a cooling economy.
The job losses at JD.com are primarily out of its group-buying unit, Jingxi, where some 10-15% of staff will be axed, according to Chinese media outlets 21st Century Business Herald, online news site The Paper, and financial blog 36Kr, citing unnamed sources familiar with the online retailer’s plans. Group-buying platforms, such as those managed by Jingxi, offer goods and services at significantly-reduced prices when a minimum number of users commit to purchasing them. Based on Jingxi’s headcount of 4,000, some 400 to 600 are likely to lose their jobs, financial news site 36Kr reported.
Jingxi, launched in 2019, is part of JD.com’s “new business” segment, which has been racking up losses. The segment reported losses of 3.22 billion Chinese yuan ($ 505.9 million) during the three months ending on December 31, 2021, JD.com’s latest earnings report shows. That’s more than double the losses recorded a year ago.
The JD.com news comes as Alibaba, another e-commerce giant, is said to be considering laying off at least 15% of its staff this year. That would amount to around 39,000 people losing their jobs, Reuters reported, citing unnamed sources.
Tencent, which has around 86,000 employees and owns the popular WeChat messaging platform, is also considering cutting 10% to 15% of its staff in specific business units this year, the same Reuters report said. Most of the cuts will come from its cloud and smart sectors and its platform and content business groups, an earlier 36Kr report said.
JD.com, Alibaba, and Tencent did not immediately respond to Insider’s queries.
Though job cuts at China’s largest tech companies are not uncommon, this round of layoffs is the first major one since Beijing’s crackdown on homegrown tech giants. The central government ratcheted up its scrutiny of labor and consumer rights issues in the sector, launched antitrust probes against tech companies, and increased oversight on data security.
Tech firms have also struggled to encourage users and consumers to spend more as China’s economy cools. Even though the country reported 8.1% GDP growth last year, its fourth-quarter growth was only 4% from a year before, a marked slowdown from 4.9% in the third quarter and 7.9% in the second.
As a result, China’s tech giants have been posting disappointing results in recent earnings reports. JD.com reported its worst revenue growth in six quarters, according to Reuters. Alibaba marked its slowest increase in revenue since listing in the three months ending December 2021, Bloomberg reported. And Tencent’s sales grew at its slowest pace in 18 years during the third quarter of 2021, according to Bloomberg. The company is expected to report full-year numbers later this month.