China’s once-resilient tech economy starting to crack under pressure from coronavirus economic carnage
- In the first quarter of 2020, the number of Chinese recruitment postings across all industries fell 22.6 per cent compared with the same period last year
- A survey found that 5.4 per cent of tech firms experienced job cuts while 12.9 per cent have reduced contractors, interns and part-time employees
This is the tenth in a series on the impact of the coronavirus on China's technology sector
While the coronavirus pandemic has boosted certain sectors of China’s digital economy, many internet-related businesses that intersect with the offline world have been hit hard and are cutting costs through lay-offs, salary reductions and hiring freezes.
China’s version of Airbnb, online lodging sharing and booking site Tujia, was optimistic about its prospects for 2020 before the outbreak of the coronavirus, according to a former employee who spoke to the Post on the condition of anonymity.
Instead, Tujia has had to lay off 800 employees, representing some 40 per cent of its total staff, local media The Beijing News reported, citing information circulated on career community platform Maimai.
The company faced a cash crunch that meant it would be unable to pay all compensation until June, the employee, who lost her job in March and is still waiting to be paid back wages, told the South China Morning Post. “If not for the Covid-19 pandemic, the company may have turned profitable this year,” she said. A Tujia representative declined to comment on the lay-offs.
Chinese companies like Tujia are among the many tech-related businesses hard hit by the economic crash caused by the coronavirus pandemic. The downturn in their fortunes contrasts with the surge in users seen by such sectors of the digital economy as gaming, online education and food deliveries during shutdowns tied to the outbreak.
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