When Aaron Wang joined Chinese social media company ByteDance at the age of 25, she thought she had found her dream job. In a city in eastern China, Wang ran projects that gathered hundreds of millions of views on ByteDance’s Douyin platform, China’s version of TikTok. She said clients respected her and friends asked for job referrals. In addition to a good salary, she enjoyed office perks, such as free snacks and company souvenirs, like mugs, tote bags, and battery banks. She described her colleagues as energetic young people who worked as dance teachers or fashion models on the side. Same-sex couples posted about their relationships on the internal forum. The company had an inclusive culture — a rarity at Chinese workplaces.
For two years, Wang said things were going perfectly. Then, at the end of 2021, ByteDance abruptly cut the business she was working on, telling her team to choose between relocation and layoff. Wang had to quit, in order to stay with her family.
Wang landed a new job at e-commerce firm JD.com in March this year. During the interview process, her manager, who had been there for eight years, assured her that the company did not take layoffs lightly.
Two weeks later, Wang was let go on a video call, along with more than 100 other employees, including the manager. She was struck by anxiety. “It’s so hard to find a job,” Wang told Rest of World. “I couldn’t even tell my parents about this.”
For more than a decade, many of China’s young, well-educated workers have made it their goal to join one of the country’s internet giants — companies such as Alibaba, Tencent, Baidu, JD.com, and, more recently, ByteDance. Tech jobs came with all the perks: high salaries, large bonuses, social prestige, and stock options that could potentially turn employees into millionaires at the next initial public offering.
The workplace culture at these companies was appealing: On team-building days, tech workers at some companies might get free trips to Universal Studios or ski resorts. At annual company galas, employees enjoyed live performances by pop stars, or, in the case of Alibaba, a Michael Jackson dance by tech mogul Jack Ma himself. “Their technologies and benefits are all top-notch,” a 23-year-old former ByteDance intern told Rest of World. “Even the chair I used at ByteDance cost 5,000 yuan [$740].”
That heyday appears to be coming to an end. The Chinese tech industry is now battling regulatory crackdowns, harsh Covid-19 lockdowns, and a general slowdown in investment and consumer spending. China’s biggest tech companies, including Alibaba and Tencent, are posting their slowest revenue growth in years and laying people off at an unprecedented rate. The two tech giants are reportedly planning to lay off tens of thousands of workers this year. Meanwhile, ByteDance has fired hundreds of people working on gaming and edtech. Ride-hailing giant Didi Chuxing, caught in a cybersecurity investigation, has conducted companywide layoffs. Xiaohongshu, an Instagram-like social media platform, has cut at least 9% of its workers, and game streaming sites Huya and DouYu have collectively let go of hundreds of people. Zhihu, a platform similar to Quora, is estimated to have laid off 20% of its workforce, triggering disputes over severance pay.
Rest of World spoke with more than a dozen workers at Chinese internet companies who have recently been laid off, had their job offers rescinded, or have witnessed the dismissal of their colleagues. Having fought hard to join Chinese tech during its boom days, they say the work now means long hours, tremendous stress, and instability.
Some firms have fired veteran coders and rescinded offers that took students years of preparation and multiple rounds of interviews and internships to get. Recruiters and workers say that finding a new tech job has never been so hard, with companies freezing or reducing headcount. “It seems to be the first time since the 2008 financial crisis something this big is happening,” Xu Dandan, chief executive of tech recruitment site Lagou, said in a recent podcast interview. “The size and scope of these layoffs are both rarely seen.”
The so-called “internet winter” is threatening the industry’s dominance over China’s talent market. Young workers are questioning whether it’s worth putting up with the long hours and stress of a tech company role — when these same jobs seem to be vanishing.
Only a few years ago, Chinese internet companies and their investors were pumping cash into experimental, unprofitable businesses, all trying to build ecosystems that encompassed everything from e-commerce to social media, gaming, health, education, and filmmaking. This expansion was accompanied by aggressive hiring. Alibaba had about 13,000 employees in 2011. By March 2022, it had more than 250,000. Tencent’s staff grew from about 12,000 in 2011 to more than 112,000 over the past decade. ByteDance, which was founded in only 2012, employs more than 100,000 people today.
But this kind of explosive growth in the tech sector brought with it scrutiny from the Chinese government. The Communist Party has a growing aversion to the massive influence these private companies exert over the Chinese economy, society, and politics. Since late 2020, the government under Xi Jinping has waged a fierce crackdown against the consumer tech giants, targeting what it deems to be antitrust behaviors, data privacy infringements, and vulgar digital content. A ban on after-school tutoring has specifically affected edtech companies, while restrictions on video games have impacted the gaming sector.
The series of crackdowns has wiped billions of dollars of value from tech companies and forced Ant Group and ByteDance to shelve their mega IPO plans. Instead of pursuing profits and expansion, managing political risks has become a new priority. “It is natural for tech firms to cut many lines of business that have previously operated in areas without regulatory clarity or could raise political concerns with the party,” Xin Sun, a political economy researcher at King’s College London, told Rest of World. “The tech giants are intending to signal that they are not building empires or amassing undue influence that could threaten either the single-party rule or Xi’s leadership.”
A faltering economy, made worse by ongoing Covid-19 restrictions, is contributing to the panic. Since the start of the pandemic, the government has put major cities, including Shanghai and Shenzhen, under periodic zero-Covid lockdowns, sometimes forcing shops and factories to shut for months at a time. Industrial production, retail sales, and property sales have been falling in recent months. “Everything happens to be hitting on it at the same time,” Kido Huang, a senior manager at recruitment firm Randstad China, told Rest of World. “If it were not for the Covid [lockdown], plus the war in Ukraine, plus the global stock market crash, plus the U.S.-inflation, there would not be such a big impact on the internet industry.” According to executives and recruiters, cost control is the tech industry’s new mantra.
While layoffs have become commonplace, most firms are unwilling to disclose detailed plans to reduce their headcount. Instead, they refer to staff cuts by euphemisms such as “graduation,” “optimization,” “structural adjustments,” or “normal business.”
When asked by Rest of World about the layoffs, search engine giant Baidu said that “a small number” of staff were affected when it made “optimization” to its education, property, and gaming businesses late last year. A Tencent spokesperson referred Rest of World to an earnings call where executives said they expected a slower growth in headcount. ByteDance, Alibaba, and JD.com did not respond to requests for comment.
Ten tech workers who lost their jobs over the last eight months told Rest of World they experienced a mix of shock, anger, betrayal, and, in some cases, relief. Some have fought for compensation, and others said goodbye in tears.
During the JD.com meeting where Wang was fired, she recalled that a manager in his 40s cried as he thanked the staff for the work they had done. Wang said her colleagues often worked until 10 p.m. without getting overtime pay, out of devotion to the company. The meeting ended with everyone wishing one another the best in their upcoming job searches.
Rachel Chen, who attended a university in the U.S., lost her job as a product manager at search engine giant Baidu last year. In November, the 29-year-old was called into a meeting with hundreds of others who were being let go. She still hasn’t told her mother she was laid off, pretending instead that she is working from home. Weeks before she was let go, Chen’s father died in a car accident. Chen doesn’t want her mother, who was also in the accident, to worry.
For many, the layoffs couldn’t have come at a worse time. Xiaohongshu and podcast app Ximalaya fired staff in Shanghai while they were confined at home by a weeks-long zero-Covid lockdown. “The lockdown was stressful enough, and then I was fired,” said one Ximalaya worker in their 30s, who requested anonymity for fear of retaliation. “Ximalaya always talks about climbing high. I had naïvely believed it would stand by its values.”
Many small firms are also making cuts, as they expect drops in sales and a dearth of new investments. One manager at a tech startup in Hangzhou told Rest of World he was asked to lay off one-third of his team members as part of a cost-cutting program. During a special training session, he was told to avoid the term “fire” by announcing, “You will now be leaving the company.” The people he let go included a father with a primary-school-age child and a fresh graduate who had recently rented an apartment near the office. The night before, the manager said he could not sleep. “It was a cruel job,” he recalled. “I felt like an executioner carrying out death sentences.”
For those who still have jobs, witnessing colleagues leave has been a stressful experience. Some workers told Rest of World that their fellow employees had been less productive than usual, expecting that their projects might be scrapped. A 24-year-old coder at Alibaba, who gave only his surname, Wang, compared a wave of layoffs in May to the parlor game Mafia, in which players are discreetly eliminated.
“Every now and then, some colleagues just suddenly disappear,” he said. Wang has attended several farewell dinners recently, where outgoing employees were gifted Alibaba mascots. Though he’s been with the company for only six months, Wang is now applying for jobs in North America and Europe.
Not everyone has been devastated by being laid off. Among China’s white-collar tech workers, discontent had been on the rise for years.
In 2019, some tech workers joined an online outcry against the prevalent “996” work schedule — 9 a.m. to 9 p.m., six days a week — quoting Karl Marx and Chairman Mao, to protest what they called capitalist exploitation. Sudden deaths of young employees regularly ignited public outrage. Several former tech workers told Rest of World they had been bullied by their managers. Young women said they had been made to promise during job interviews that they would avoid getting pregnant. Almost everyone Rest of World spoke with described their tech job using the buzzword “involution,” a term that refers to a sense of burnout owing to intense competition with colleagues.
For some employees, losing their job was the push they needed to finally leave the tech sector altogether. An e-commerce operation specialist in her late 20s, who requested anonymity for fear of being identified by her former employer, said she sometimes worked overnight when she was at a leading internet firm. “I felt so great the second day of being fired,” she told Rest of World, adding that she lost five kilograms in a month, thanks to a healthier lifestyle. “My entire body and mind were at ease,” she said.
Over the past decade, some millennial workers in China have gone through the grueling education system with hopes of joining tech companies. Wealthier families paid hundreds of thousands of dollars to send their children to Ivy League schools, so they could fulfill the so-called “big firm dream” at an internet giant.
Now, the layoffs have hit hard for those who have built their lives around a tech worker’s robust income. For years, employees who followed the billionaire tech tycoons’ call for hard work and competed fiercely for promotions and pay raises could afford to buy properties in major cities and send their children to expensive tutoring classes that paved the way to prestigious universities — symbols of middle-class success in China. Now, those workers have to make new life plans that don’t depend on a tech salary.
Like many spouses of highly paid internet workers, Anna, who asked to be identified by only her first name, due to privacy concerns, quit her job to become a stay-at-home mother. The couple also took out a mortgage to get an apartment in the southern metropolis of Guangzhou.
In April, Anna’s husband, now in his late 30s, was let go by the company he spent more than a decade working for. On her Xiaohongshu page, Anna listed the household’s monthly expenses: 7,220 yuan ($1,099) for the mortgage, 3,802 yuan in groceries, and 1,280 yuan in childcare. “I felt the sky was falling down,” Anna wrote on her page, adding that she was worried about whether they would have enough money for their child’s education.
Berry Liu, head of a recruitment startup in the tech hub of Shenzhen, said that, until 2020, a senior software engineer looking to change jobs could get 10 to 20 offers. Asking for a 50% to 100% salary increase was common, as cash-rich companies hired as much talent as possible, to staff budding projects. But recently, Liu said, most leading firms have stopped hiring through headhunting agencies. “In the past few years, internet companies had a lot of money. … Not a single firm wanted to be left out on the next hotspot,” said Liu, who has worked as a tech headhunter for a decade. “Now, every company is talking about cutting costs and increasing efficiency.”
Analysts say that the layoffs do not necessarily signal a long-term downturn for the tech industry. Hong Hao, a Hong Kong–based economist, said that China’s internet giants still have great growth potential, and the current wave of layoffs reflected the fact that companies were pulling back from unprofitable businesses amid a bad economy. “Before, the entire structure was too bloated,” he said, adding that the tech industry would still play an important role in providing employment in the long run.
But for young workers who once viewed job offers from tech giants as tickets to success, and who have worked late nights trying to help the founders overtake their rivals, getting let go is a painful reminder that the internet whirlwind does not last forever.
Li Xiaotian, a University of Hong Kong researcher who studies China’s internet economy, said that by joining the internet industry, elite workers had given up the lifetime employment offered in the state sector for higher income and personal development. But as the industry enters a period of monopoly dominance, slowing growth, and fierce competition, more people are starting to view themselves simply as laborers prone to the exploitation of tech tycoons. “If you get fired by Jack Ma now, you would find it difficult to find a job that pays the same,” Li said.
Despite the recent challenges, the tech industry remains a top career choice for many Chinese workers. The recent economic downturn has resulted in layoffs in other sectors, too, and, according to some tech workers Rest of World spoke with, they at least generally received better severance pay than those in other industries and had more personal savings to fall back on. But with mounting uncertainty in the private sector and high youth unemployment, many young workers are considering government jobs instead.
That’s a stark departure from the ’90s and early 2000s, when droves of civil servants quit their jobs to become entrepreneurs –– dubbed xiahai, or “jumping into the sea.” Today’s Gen Z college graduates are dropping the get-rich dream for the lower-paid but stable option of a state job. In 2021, a record 2.12 million applicants registered for the national civil service exam, competing for 31,200 positions. Getting one of these jobs is dubbed shang’an, or “landing ashore” –– it’s a secure position.
As a pop culture fan, college graduate Philom Yang interned at the entertainment arm of social media firm Weibo and a company that worked on projects with Tencent. Although Yang loved the free afternoon teas and youthful culture at the internet firms, the stress, overtime work, and instability of working in tech put her off. This year, the 22-year-old decided to pursue a civil service job back in her hometown in Hebei province, which offers 50% less pay than the average entry-level tech role. “You can feel the economy is not doing well,” she said. “[Becoming a civil servant] is the best option for now.”
In April, Wang, the former ByteDance and JD.com employee, got a social media job at a pharmaceutical company after being laid off for the second time. In addition to taking a nearly 40% pay cut, she had to adapt to a drastically different workplace culture: projects needed to go through rounds of approvals by upper management; unlike in tech, her colleagues, many of whom are near retirement age, would never work through holidays. Women are required to wear below-the-knee pants or dresses. No one is out as gay.
The lack of stress, however, is giving her a new sort of anxiety. After experiencing the ups and downs of the internet industry, she has trouble sitting around waiting for the next paycheck. She thinks about how fellow tech workers worked until 3 a.m. to stay competitive, missed mortgage payments after getting laid off, or have died on their jobs. “What if this company also falls?” she said. “I don’t want to get crushed when something else happens.”
Wang is making as many back-up plans as possible: she is perfecting her illustration skills, registering for the next civil service exam, and studying for architecture safety as well as teaching certifications. If nothing works out career-wise, she plans to have a child during the economic downturn.
Wang figures that when she reaches 30, she might come back to a company like ByteDance, where she can work hard for a few years to save up for retirement before she hits 35 — the unofficial cutoff age set by the infamously ageist tech companies. As a former employee, she still owns stock options in ByteDance and remains hopeful about the company’s potential initial public offering, which has been reportedly in the works since 2020. “I don’t have any big ambitions,” Wang said. “I just want to have enough money to retire.”