The Numbers: Who Cut and Who Grew
In 2025, Alibaba reduced its head count by 34% [1]. Baidu ended the year with nearly 7% fewer employees [2]. BYD cut roughly 10% of its workforce [3]. Tencent, by contrast, reported a modest 5% increase, bringing total staff to 115,849 [15]. Alibaba, Baidu, Tencent, and BYD did not respond to Rest of World's request for comment [4].
A Global Wave of Tech Layoffs
The cuts are not unique to China. 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 [5]. In April 2026, Snap laid off 16% of its staff and withdrew hundreds of open roles, citing 'rapid advancement in AI' [6]. In March 2026, Oracle shed thousands of employees [7]. In 2025, Amazon cut about 30,000 jobs [8]. Meta laid off more than 1,000 employees in 2025 [9], and may reduce its workforce by another 10% in the near future, according to Reuters [10].
Why Chinese Companies Are Cutting
The Chinese government has warned that AI development would bring 'inevitable' job losses due to a restructuring of the labor market [11]. At the same time, it has pledged to boost emerging industries such as AI and EVs to generate new jobs [12], aiming to create more than 12 million urban jobs in 2026 and keep the urban unemployment rate below 5.5% through 2030 [13].
Sun Zhongwei, a professor at South China Normal University, said many Chinese tech companies expanded rapidly during the internet boom and the current layoffs are more about adjusting to a downturn than AI displacing jobs [20]. A former Baidu employee, laid off in March 2026, said financial pressure was the reason the company gave her for the layoff [21]. Chen Li, an analyst from Anbound, said Chinese companies share financial pressure with American companies but also have to fulfill social responsibility, making them more reserved in their pace, ways, and narratives on layoffs [22].
Selective Hiring in AI and R&D
Despite the cuts, companies are selectively hiring. BYD accelerated hiring for research and development roles by nearly 5% in 2025 [14]. Claire Deng, a Shenzhen-based headhunter, said 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 [17]. She noted a surge in hiring related to AI-agents and physical AI products [18]. A former Tencent executive said the company has been simultaneously hiring and firing since the pandemic in 2020 [16].
The Impact on Workers
Claire Deng said some jobs on the frontline are already being replaced by AI, but AI has not had a systemic impact on the labor market yet [19]. The Chinese government's pledge to create new jobs in AI and EVs offers a counterbalance, but the near-term pain is real for thousands of workers.
What to Watch Next
As AI continues to advance, the tension between job displacement and creation will intensify. The ability of Chinese tech giants to navigate this transition—balancing cost-cutting with strategic hiring—will shape not only their own futures but also the broader labor market in China and beyond.