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What jobs crisis? Top Chinese regulator says tech is booming


In a rare, direct response by a top government agency to fears of a jobs crisis, the Cyberspace Administration of China said Friday that the country’s 12 tech giants hired more workers than they lost in the past nine months. It cited recent “heated public discussion” about reports of “large scale layoffs” at the large internet companies.

The CAC said it had recently spoken with A-list tech companies such as Alibaba (BABA), Tencent (TCEHY), Bytedance, (JD), Pinduoduo (PDD), and Ant Group. At these companies, 216,800 people had left their jobs between July and mid-March, while 295,900 people were hired during the same period, the survey found.

“The total employment at the companies has increased steadily,” the CAC said in a statement. They had recorded strong growth in some new businesses, with their revenues “repeatedly hitting new highs,” it added.

“They are full of confidence in future development, ” the CAC said.

The CAC statement paints a more upbeat picture than recent earnings statements from some of those companies, as well as comments from other government officials on the health of the wider labor market. It also contrasts with the reluctance of the tech companies themselves to respond to reports of job losses.
In recent weeks, international media outlets have reported that China’s tech sector is facing its worst job losses since the government launched a crackdown to rein in its most powerful companies in late 2020.

The once-freewheeling industry was long the main source of well-paid employment in China, but companies such as Alibaba and Tencent are now reportedly preparing to shed tens of thousands of employees to reduce operating costs. Both have repeatedly declined to comment.

Some of the biggest players in Chinese tech — Alibaba, Tencent, and Pinduoduo have all reported their slowest revenue growth on record, and their share prices have halved since regulatory crackdown began.
Private job surveys also indicate that jobs are being lost across the economy, and in tech in particular. Analysts predict that job losses will likely get worse, because the tech sector slump is happening at the same time as the crisis in real estate and related sectors, which account for about 30% of China’s GDP.

Nevertheless, while the CAC is sounding upbeat about tech jobs, other top government officials are painting a much bleaker picture about the health of the labor market.

Hu Chunhua, China’s vice premier, on Friday called for “all-out efforts” to stabilize employment.
“Affected by the Covid outbreak and other factors, the employment situation is complex and severe now,” Hu told representatives from companies and government departments, according to state-owned Xinhua.

He urged the executives to stabilize and expand employment, while government officials must solve the problems faced by businesses in a timely manner.

Just days earlier, Premier Li Keqiang stressed the importance of keeping employment stable and helping small businesses survive the difficult times.

Lockdowns in Shanghai and other Chinese cities pose a growing threat to the economy

The economy is facing “new downward pressures” amid renewed Covid outbreaks and rising global food and commodity prices, Li said last Wednesday at a key government meeting.

“Some businesses have been severely impacted, and some have even stopped production or closed business,” he said. “We must increase rescue efforts and provide employment guarantees in response to their difficulties.”

The Chinese government has set a GDP growth target of 5.5% for 2022. But the World Bank and some investment banks have recently warned that the damage caused by China’s zero-Covid policy to the economy is growing.


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