Chinese tech giants are quietly shrinking their workforce — echoing a pattern playing out in Silicon Valley.

In 2025, e-commerce major AlibabaiAlibabaAlibaba, founded in 1999 by Chinese entrepreneur Jack Ma, is one of the most prominent global e-commerce companies that operates platforms like AliExpress, Taobao, and Tmall.READ MORE reduced its head count by 34% as it continues to axe its workforce in its offline business units to focus on artificial intelligence and cloud infrastructure. Search giant BaiduiBaiduBaidu is a Chinese technology company that operates the country’s biggest search engine and video-streaming service iQiyi.READ MORE ended 2025 with nearly 7% fewer employees, while electric-vehicle maker BYD cut roughly 10% of its workforce. These numbers were disclosed in the companies’ annual reports, filed at the end of March.

While job cuts at tech companies are often framed as part of an AI-driven transformation, Chinese experts point to broader economic pressures — such as a slowing economy, weak consumer demand, and a prolonged property crisis — for these layoffs. The trend also reflects a correction after years of rapid hiring, experts told Rest of World.

“Many of these companies expanded rapidly during the internet boom, hiring at an exponential pace,” said Sun Zhongwei, a public administration professor at South China Normal University. “The changes in their organization structure are much more about adjusting to a downturn after that cycle of growth than being about AI displacing jobs.”

A former Baidu employee, who was laid off from the marketing department in March, told Rest of World that financial pressure was the reason the company gave her. “Since last year, the company has been cutting people in so-called non-core departments. I saw it coming,” she said, requesting anonymity to protect her future employment opportunities.

Alibaba, Baidu, TencentiTencentBest known for its super-app WeChat, Tencent is a Chinese technology conglomerate and a major player in the video gaming industry.READ MORE, and BYD did not respond to Rest of World’s request for comment for this piece.

“Inevitable” layoffs

Chinese tech companies sit at the center of Beijing’s economic strategy as it competes with the U.S. in advanced technologies. Layoffs by these companies are in line with their U.S. counterparts, which have been cutting jobs while ramping up investment in AI.

Since the start of 2026, tech companies have announced 78,557 job cuts worldwide, of which about 76.7% were by U.S.-based firms, according to an April report by RationalFX, a U.K.-based financial services firm.  

This month, social media company Snap laid off 16% of its staff — around 1,000 people — and withdrew hundreds of open roles, citing “rapid advancement in AI.” In March, Oracle shed thousands of employees. In 2025, Amazon cut about 30,000 jobs, while Meta laid off more than 1,000 employees. Meta may reduce its workforce by another 10% in the near future. 

The Chinese government has warned that AI development would bring “inevitable” job losses due to a restructuring of the labor market. However, the government has pledged to boost emerging industries such as AI and EVs to generate new jobs. The government says it aims to create more than 12 million urban jobs in 2026 and keep the urban unemployment rate below 5.5% through 2030.

This is part of the reason why Chinese companies do not announce their layoffs openly. 

“While Chinese companies share financial pressure that American companies are under in reallocating resources to AI businesses, there is a layer of social responsibility they have to fulfill as corporations,” Chen Li, an analyst from Beijing-based think tank Anbound, told Rest of World. “They need to consider if they are going to be seen as going against the government’s priorities in ensuring a stable employment rate, local economic prosperity, and social stability. This would make them more reserved in their pace, ways, and narratives on the layoffs.” 

“Constant churn”

Just like their American rivals, Chinese companies are selectively hiring even as they carry out layoffs in droves.

BYD, which laid off part of its frontline production staff, administrative teams, and sales department, accelerated hiring for research and development roles by nearly 5% in 2025.

China’s largest tech company, Tencent, reported a modest 5% increase in head count in 2025, bringing total staff to 115,849. A former Tencent executive said the company has been simultaneously hiring and firing since the pandemic in 2020.

“There’s constant churn,” the executive, who asked to remain anonymous as he is not authorized to speak to the media, told Rest of World. “Hiring is now focused more on fresh graduates, partly because companies are under pressure to create jobs — especially with the expectations that AI will generate new employment and help address youth unemployment.”

Claire Deng, a Shenzhen-based headhunter specializing in AI and tech talent, told Rest of World that Chinese tech companies had frozen hiring in 2022, but there has been an uptick in the past year due to new business opportunities driven by the AI boom. There has been a surge in hiring related to AI-agents and physical AI products, she said.

“Some jobs on the frontline are already being replaced by AI, but I don’t think AI has had a systemic impact on the labor market yet — it’s still quite fragmented,” said Deng. “Companies are in a transition phase. Some are experimenting with replacing staff with AI, but that requires a full redesign of workflows and talent structures. Most firms aren’t ready to move that aggressively yet.”