Alibaba and Tencent are Laying Off Thousands of Employees

Synopsis – According to the sources one of the biggest companies in China, Alibaba will lay off around 39000 employees, and started to fire employees around several business units from the last month. Whereas Tencent, which is the owner of China’s biggest and dominant messaging application WeChat is planning to lessen the headcount up to 10%-15%

In an announcement from tech giants, Alibaba Group and Tencent Holdings, they said that the companies will lay off a huge number of employees, up to thousands due to slow economic growth due to Covid-19 along with regulatory crackdown in China. Through internal speculations, it is being said that Alibaba will lay off around 30% and Tencent will lay off around 10% of their employees. 

This is not the first time that the employees are suffering, but since the pandemic, many tech and other companies have taken the decision of laying off their employees and as it has become the origin of the virus, the business has been affected most. 

According to the sources one of the biggest companies in China, Alibaba will lay off around 39000 employees, and started to fire employees around several business units from the last month. Whereas Tencent, which is the owner of China’s biggest and dominant messaging application WeChat is planning to lessen the headcount up to 10%-15%. Although, none of the companies has confirmed the same or they did not even respond to any such statement. Since the launch of Chinese regulation in the year 2020, this is the biggest layoff that the country will witness. 

The main reason behind this is the regulatory crackdown due to the slow growth in the economy. This has also laid down the sales of most of the internet companies along with smashing down the share prices. In addition to this, the slump in export, real estate, manufacturing, and consumer spending are the reasons that have coupled along and made the business expansion very tough in the second-largest economy of the world. 

Also, as per the latest data by the National Bureau of Statistics in the last few months, China has recorded the lowest economic growth by 2.3 percent. Hence, the biggest companies in China have been forced to cut down the operating costs. 

With inflation all around, China has targeted only 5.5 percent growth in GDP, which is the lowest in decades. Also in accordance with several reports, it has been stated that rising prices of crude oil are in line to worsen the economic woes in China. In the year 2021, the GDP growth in the country only restrained up to 8.1 and it is said that in 2022 it is very hard to reach 5.5 percent also. 

Hence, due to all the reasons, China is also facing a major problem of unemployment and has to take certain strong steps to curb the situation. 

Apart from Alibaba and Tencent, DiDi Global was also added to the list of minimizing headcounts due to the same reason and they are planning to cut by almost 15% as the situation has also hampered the domestic business.