[NTDTV, Beijing time, April 4, 2022]China’s Internet giants have recently launched another wave of layoffs. Recently, the e-commerce leader JD.com has just completed the latest round of layoffs, and it has been reported that thousands of people lined up to leave within a day. Some economists said that the triple pressures facing China’s economy this year are fermenting, unemployment and inflation rates are likely to increase, and China’s pain index will continue to rise this year.
After companies such as Alibaba and Tencent laid off tens of thousands of employees in February this year, JD.com also launched a new wave of layoffs in March.
According to a report by NetEase News, the layoffs of the entire JD Group have been going on for two weeks, and there is no sign of stopping. A JD.com employee said that on March 31, a large number of laid-off employees were waiting to go through the resignation procedures at the SSC (Employee Service Center) in Building 1 of the JD.com headquarters building. Multiple numbers. Moreover, at present, Jingdong has several office buildings, such as Building 1, Building 2, and Building 4, which are put into use.
An employee who worked in JD Logistics also said that the proportion of JD Logistics’ layoffs was estimated to be 40%, and the reasons for layoffs were unacceptable. In addition, the pharmaceutical department of JD Health also reported that the proportion of layoffs is as high as 20%, and the proportion of financial resources in online hospitals is as high as 60% to 70%; there are also branches of Jingxi, an emerging shopping platform under JD.com in Guangxi, Sichuan, Jiangxi and other places. It is reported that “all staff have been laid off”, and even Jingxi’s R&D department has reported a 25% layoff.
On the online social media Weibo, some employees claiming to have left JD.com posted that JD.com called them a group of “graduated” JD.com people in the resignation notice. Some netizens reiterated the old story that JD.com chairman Liu Qiangdong had vowed to “won’t fire any brothers”, and posted an article satirizing JD.com’s “won’t fire brothers, only let them graduate.”
In response to the above situation, Li Chengdong, founder of Dolphin Think Tank, told VOA that this wave of layoffs of Internet companies is mainly affected by the resurgence of the epidemic and China’s short-term negative impact on the pursuit of zero and strict closure of cities, and is relatively pessimistic about revenue. The company has simply laid off one or two percent of the redundant staff it had built up from its previous overexpansion to streamline spending.
Li Chengdong said: “It turns out that large Internet companies have redundant employees. Because the business is expanding, you will recruit a lot of people to reserve for future growth. Now layoffs are because of future business and future growth, it is not so much optimistic or relatively pessimistic.”
He also said that many manufacturing industries, such as the automobile industry, are actually facing the dilemma of not being able to recruit people, because migrant workers have returned to their hometowns to hide from the epidemic and are reluctant to go out to work. However, he also admitted that the current epidemic and China’s closure of cities have had a great impact on the economy, especially the service industry is facing employment difficulties, which may significantly increase the unemployment rate this year.
Qiu Dasheng, a researcher at the Taiwan Economic Research Institute in Taipei, said in an interview with VOA that in addition to the impact of the epidemic, this wave of Internet layoffs and the CCP’s various regulatory suppression and antitrust investigations on some industries since last year Or left-leaning movements such as common prosperity.
Qiu Dasheng said that the CCP has tightened regulatory norms over the past year, compressing the profit and growth prospects of the Internet industry. In addition, the Beijing authorities shouted the slogan of “common prosperity”, implying that the tycoons and wealthy businessmen who make money should give back the profits to the society. Therefore, under the premise that the profit may not be enough for the cost, it is an inevitable medium and long-term trend for Chinese Internet companies to implement “minimization of labor costs”.
Qiu Dasheng also pointed out that due to the poor protection of China’s domestic vaccines, it is difficult for China to move towards an epidemic prevention model that coexists with the virus, and the current economic-costly closed city epidemic prevention model cannot be loosened soon.
Qiu Dasheng said: “China’s stock market is closely related to the engine that China wants to boost now, that is, private consumption. Because there is no support for the stock market, the growth of private consumption will be insufficient.”
In fact, the stock prices of many Chinese Internet companies have fallen by at least 50% from their historical highs recently. For example, Alibaba’s stock price on April 1 was down 66% from its all-time high, while video platform Bilibili and social e-commerce platform Pinduoduo were down from their all-time highs on April 1, respectively. plummeted 83% and 78%.
Qiu Dasheng said that in addition to the shrinking of private wealth, the sharp drop in stock prices is also one of the factors behind this wave of Internet giants lacking funds to expand and must control labor costs. The challenges facing China’s economic outlook are very large. If Beijing maintains an easy monetary policy, it may be difficult to cope with imported inflation. And if inflation and unemployment both rise, the pain index for the Chinese economy will also rise.
(Comprehensive report by reporter Li Ming/responsible editor: Fan Ming)
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