Mass layoffs = winter of Chinese tech? Not exactly true!

As the temperature in Beijing reached almost -10°C, the winter is in full blown mode.

So is the metaphorical sentiment in China’s tech ecosystem. News about layoffs, salary cuts, annulment of bonuses and company shutting-downs are shared on social media on a daily basis.

To the extent that the Meng Wei, the Spokeswoman of the National Development and Reform Commission (the powerful ministry that manages China’s macro economy), has to make an announcement that the hiring and employment of the tech sector remain strong and stable.

Interesting, upon a closer look, you will find out that the “Winer” is not new. Since 2015, every year around the winter time the press and social media is full of talks about layoffs, salary cuts, annulment of bonuses and company shutdowns.

In fact, from the number of jobs available and types of job available (source: recruitment platform Lagou), there isn’t really much difference. i.e. Companies are still recruiting.

So what is happening?

If every company in your sector is laying off people and restructuring the team, what would you do?

Yes you do the same – for two reasons:

1. You can easily blame the macro environment, which makes firing (and non-payment of bonus) easier
2. If everybody is restructuring and you are not, you will lose competitiveness in a fiercely competitive environment.

Not that hard a choice to make.