Beijing, China – Instead of a pink slip from his boss, Zhang Wei learned that he was about to lose his job at Chinese video streamer iQiyi via a work group chat.
Zhang’s supervisor only confirmed the news after the Beijing-based company’s cuts in December were leaked to the media.
“Even if I knew in advance, I still couldn’t believe it,” Zhang, who asked to use a pseudonym, told Al Jazeera.
Zhang is just one of thousands of workers in China’s tech scene who have been laid off after Beijing’s stock price regulation explosion in private business and years of aggressive sector expansion, analysts say. leaving some companies overweight.
Nearly 73,000 workers were laid off between July and mid-April alone, according to research by TechNode, a media outlet that covers Chinese technology and start-up scenes. Later in April, lifestyle app Xiaohongshu, often described as the Chinese version of Instagram, fired about 10 percent of its workers.
“The reasons are not only these layoffs, but also the frozen headcount in many divisions, current hiring ends and internships discontinued, a combination of poor macroeconomic outlook, pressure- os to focus on profits and cutting unprofitable businesses, and more specifically regulating the sector, ”Rui Ma, an angel investor and founder of the Tech Buzz China podcast, told Al Jazeera.
The future may be even worse.
Alibaba and Tencent, China’s two internet titans, plan to lay off thousands of employees combined this year, according to a report published in March on Reuters, citing unknown sources. close to companies.
Gao “Noah” Zihao, co-founder of Beta, a headhunting firm that works with major Chinese technology players, said many tech companies are overstretching themselves by trying to “double the their business models ”in new industries, pointing to Meituan’s food delivery platform. retail push and e-commerce platform Jindong’s hijacking of groceries as examples.
“These moves are more aggressive to make money, leaving companies with few options other than cutting departments that don’t make money,” Gao told Al Jazeera.
Gao added that qualified technology candidates find it increasingly difficult to get job interviews as companies announce smaller openings.
iQiyi, Jindong and Meituan did not respond to requests for comment.
Yuwan Hu, associate director of Daxue Consulting, said China’s tech sector is now going through a period of transition after facing the limitations of one-time growth machines such as e-commerce. .
“In the past, China’s largest technology company focused on gaming, e-commerce and other traditional‘ big internet ’businesses with a huge increase in users three to five years ago,” he said. Hu told Al Jazeera, adding that rapid growth has led to a skewed focus that neglects infrastructure.
Workers “can see the ceiling, due to the maturity of the market,” Hu said. “And government policies today are not favorable to the big internet. It’s just not very robust … Today, government policy is more favorable to what we call ‘hard-core’ emerging technical industries. such as AI, cloud computing, biotech and other infrastructures. “
The importance of such a new industry, big data, can be seen in the Chinese government’s “14th Five-Year Plan for the development of the big data industry”, published in November, which describes the field as a “new driving force for economic transformation. and development”.
With workers suffering the consequences of poorly judged business expansion, authorities seek to push the “big internet” industry into areas that Beijing considers more sustainable.
“Officials now seem to be saying: ‘We have a different strategy. We care about the actual work, and internet companies can’t do that,'” Gao said. “Those internet companies are trying very hard. and poured a lot of money into the U.S. stock market. The pandemic has shown everyone that the virtual economy is not, and cannot be, the sole driver of growth. ”
Such growth is impossible without pains, according to Ashley Dudarenok, co -author of New Retail: Born in China Going Global.
“The industry is young and constantly changing at a pace in China, so we are already entering a stage of adolescence, where there are inevitable crises created in management and over-reliance on expansion,” he said. by Dudarenok Al Jazeera.
“Ecosystem technologies will continue to evolve, knowing better what their strengths are and how best to compete and collaborate with each other.”
After a difficult few years for the sector, however, there are some optimistic signs in the horizon.
China’s state media in recent weeks has signaled that it will provide more support to nervous tech companies, raising expectations of a shutdown or relaxation of the regulatory blitz that began in 2020.
Ma said she remains optimistic that tech jobs will remain attractive to workers, though perhaps less so than in the past.
“So far it [the tech sector] Still offers some of the highest salaries in China… Stock packages get a big hit of course, but that’s also a global phenomenon, ”says Ma.“ Most of these jobs can be good jobs, but it doesn’t have to be a ticket to financial freedom like it did at the beginning of the last decade. “
Despite the recent pain, the maturity of big technology is likely to benefit skilled workers in the long term, according to Gao.
“People who can code, or the key account managers who have clients, can always find a good job,” he said, expressing less optimism about the future of “project managers. , telling stories in Powerpoint presentations ”.
Hu expressed similar hope for the future.
“The short term can be tough,” he said. “But in a year or so, there are two classes of staff: those who don’t have the right technology background, who have to focus on other industries. And then, there are people with related ones. digital skills … They can develop newer skills to upgrade jobs within the technology.
For tech workers like Zhang, the turmoil in the sector came as a wake-up call.
“Technology is updating very fast. We have to keep learning so that we don’t get lost,” he said. “Not just the technology industry but any industry. I think we need to keep learning all the time. ”