China’s tech sector faces new round of lay-offs

Mainland firms join global peers from Ericsson to Intel in stepping up job cuts

Sweeping job cuts announced at major global technology firms from Ericsson and Tesla to Amazon.com and Intel are sending a chill through the industry in China, where the big tech firms are also conducting lay-offs.

Swedish telecommunications equipment maker Ericsson’s plans in China would involve cutting about 240 positions at its core network research and development (R&D) facility in the country, a company representative said in an email.

Ericsson, which last month announced it was axing about 1,200 jobs in its home market, was “diversifying [its] R&D footprint in alignment to sales”, according to the representative, who added the company “remains committed to our customers in China” and it was not exiting the market.

The firm had earlier indicated a contraction in 5G network equipment spending in large markets such as the United States.

While China’s big tech companies already saw their payrolls shrink in 2022 and 2023 to rein in costs, a number of these players have joined their multinational counterparts in shedding more jobs on the mainland.

TikTok owner ByteDance, for example, has started lay-offs at enterprise collaboration unit Feishu, affecting about 1,000 employees, according to a report by the Post last month that cited a person familiar with the matter.

Other major Chinese tech companies that have initiated job cuts include Tencent Holdings, Xiaomi, JD.com, Kuaishou Technology, Didi Chuxing, Bilibili, and Weibo.

Tesla’s China job cuts, announced internally on Monday, involved mainly sales staff and would not affect production at its Gigafactory 3 in Shanghai.

Meanwhile, the lay-offs announced earlier this month by Amazon Web Services, the cloud computing services unit of Amazon, has affected an undisclosed number of people, according to a report by Chinese media Leiphone.

US chip maker Intel, which initiated a new round of lay-offs earlier this month at its sales and marketing unit, could see its mainland operations affected as early as this week, according to a report by Taiwan newspaper Economic Daily News, citing market rumours.

Intel did not immediately respond to a request for comment yesterday.