Chine e-Commerce Giant JD.com Axes 400 Workers; Alibaba, Tencent Follow Suit
Chinese e-commerce giant JD.com has reportedly begun laying off at least 400 employees amid reports that its competitors — Alibaba, and text-messaging and gaming giant Tencent — are similarly planning to cut at least 10% of their personnel, Weilun Soon reported for Business Insider.
Photo Insert: The JD.com headquarters
The layoffs come as Chinese tech companies grapple with regulatory crackdowns and a cooling economy.
The job losses at JD.com are primarily out of its group-buying unit, Jingxi, where between 10% and 15% of staff will be axed, according to Chinese media outlets 21st Century Business Herald, online news site The Paper, and financial blog 36Kr, citing unnamed sources familiar with the online retailer's plans.
Group-buying platforms, such as those managed by Jingxi, offer goods and services at significantly-reduced prices when a minimum number of users commit to purchasing them. Based on Jingxi's headcount of 4,000, some 400 to 600 are likely to lose their jobs, 36Kr reported.
Jingxi, launched in 2019, is part of JD.com's "new business" segment, which has been racking up losses. The segment reported losses of 3.22 billion Chinese yuan ($505.9 million) during the three months ending on December 31, 2021, JD.com's latest earnings report shows.
That's more than double the losses recorded a year ago. Tech firms have also struggled to encourage users and consumers to spend more as China's economy cools. Even though the country reported 8.1% GDP growth last year, its fourth-quarter growth was only 4% from a year before, a marked slowdown from 4.9% in the third quarter and 7.9% in the second
The JD.com news comes as Alibaba, another e-commerce giant, is said to be considering laying off at least 15% of its staff this year. That would amount to around 39,000 people losing their jobs, Reuters reported, citing unnamed sources.
Tencent, which has around 86,000 employees and owns the popular messaging platform WeChat, is also considering cutting 10% to 15% of its staff in specific business units this year, the same Reuters report said. Most of the cuts will come from its cloud and smart sectors and its platform and content business groups, an earlier 36Kr report said.