Jobs crisis in China? Top regulator says tech is booming – Reuters

In a rare direct response from a major government agency to fears of a jobs crisis, China’s Cyberspace Administration said Friday that the country’s 12 tech giants have hired more workers than they need. had lost in the past nine months. He cited recent “spirited public discussions” over reports of “large-scale layoffs” at major internet companies.

The CAC said it had recently spoken with leading technology companies such as Ali Baba (BABA), Tencent (TCEHY)Byteance, JD.com (J.D.), Pinduo-duo (PDD)and Ant Group. In these companies, 216,800 people left their jobs between July and mid-March, while 295,900 people were hired during the same period, according to the survey.

“Total employment in businesses has increased steadily,” the CAC said in a statement. They saw strong growth in some new ventures, with revenue “repeatedly hitting new heights”, he added.

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

The CAC statement paints a more optimistic picture than recent earnings statements from some of these companies, as well as comments from other government officials on the health of the broader labor market. It also contrasts with the reluctance of tech companies themselves to react to reports of job losses.

In recent weeks, international media have reported that China’s tech sector is facing its worst job losses since the government launched a crackdown to contain its most powerful companies in late 2020.

The once freewheeling industry has long been China’s main source of well-paying jobs, but companies like Alibaba and Tencent are now reportedly preparing to lay off tens of thousands of employees to cut operating costs. Both have repeatedly declined to comment.

Some of the biggest Chinese tech players – Alibaba, Tencent and Pinduoduo have all posted their slowest ever revenue growth and their stock prices have halved since the regulatory crackdown began.

Private employment surveys also indicate that jobs are being lost across the economy, and in technology in particular. Analysts predict job losses are likely to get worse as the tech crash comes at the same time as the slump in real estate and related sectors, which account for about 30% of China’s GDP.

Still, while the CAC seems optimistic about tech jobs, other senior government officials paint a much bleaker picture of the health of the labor market.

Hu Chunhua, Chinese Vice Premier, called on Friday for “all possible efforts” to stabilize employment.

“Affected by the Covid epidemic and other factors, the employment situation is now complex and serious,” Hu told company and ministry officials, according to state-owned Xinhua.

He urged leaders to stabilize and expand employment, while government officials should address business issues in a timely manner.

A few days earlier, Premier Li Keqiang had stressed the importance of maintaining job stability and helping small businesses survive tough times.

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

The economy is facing ‘further downward pressure’ amid fresh Covid outbreaks and rising global food and commodity prices, Li said at a key government meeting last Wednesday. .

“Some companies have been badly affected, and some have even stopped production or closed businesses,” he said. “We need to step up rescue efforts and provide job guarantees in response to their hardship. »

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 worsen.

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