China’s Big Tech slashed jobs by the thousands in 2022 amid regulatory scrutiny, Covid-19 controls and tough competition

China’s Big Tech companies saw their payrolls shrink in the past year as they streamline their businesses and rein in costs by shedding unprofitable projects to weather Covid-19 restrictions and a year-long regulatory crackdown, their latest financial reports show.

Internet search titan Baidu and social media and video gaming behemoth Tencent Holdings each trimmed more than 4,000 roles in 2022, leaving some 41,000 and 110,000 full-time employees on their payrolls, respectively, as of December 31.

E-commerce giant Alibaba Group Holding and food delivery platform Meituan, both with a much larger workforce, cut around 20,000 and 10,000 jobs last year. Alibaba owns the South China Morning Post.

Employment at China’s largest internet companies is often considered a barometer of the country’s economic health, and the speed at which they have been slashing jobs to survive a slowing economy and regulatory headwinds has alarmed Chinese authorities.

Last April, the Cyberspace Administration of China, the nation’s top internet regulator responsible for the many restrictions placed on the industry, published an article on its WeChat account to quell heated online rumours that Chinese tech companies, once a major driver of the country’s economy, had lost their momentum under the double whammy of the coronavirus pandemic and unfavourable policies.

In that post, the agency said it visited 12 companies – including Alibaba, Tencent and Meituan – and found that the staff attrition rate was in line with the higher turnover generally found in the tech industry.

The companies had told officials that their employee count and business development remained “steady”, while expressing confidence for growth, the post said.