The technology industry in China is currently experiencing a new wave of workforce reductions as multinational corporations such as Ericsson, Tesla, Amazon, and Intel continue to implement job cuts. Despite significant layoffs at several of China’s leading technology companies in 2022 and 2023, it is anticipated that additional reductions in staff may occur at these firms operating on the mainland.

Ericsson, a Swedish telecommunications equipment manufacturer, is planning to eliminate roughly 240 positions at its core network research and development (R&D) facility in China. Additionally, Tesla is rumored to be releasing a small number of employees at its Shanghai plant, although this constitutes a minor percentage of its 20,000-member workforce involved in vehicle assembly. There are also indications that certain Tesla showrooms across China may be subject to closure.

Conversely, Amazon Web Services (AWS) has refuted claims of inaccurate compensation but has acknowledged the identification of specific operational areas that may require reorganization, potentially resulting in job cuts. An unnamed AWS employee has expressed apprehension, citing an old Chinese poem about negative omens in describing the current situation. Another Amazon employee in a non-AWS division has mentioned that some colleagues are expecting layoffs and preparing to receive their severance packages.

Moreover, American chip manufacturer Intel has recently initiated a new series of layoffs within its sales and marketing division. There are speculations that Intel’s operations in mainland China could also be impacted. Nonetheless, the company has not yet responded to inquiries regarding this matter.

Despite the downsizing evident in the tech sector, China’s overall unemployment rate has remained relatively consistent. The urban unemployment rate was recorded at 5.2% in March, compared to 5.3% in the first two months of the year.

The ongoing layoffs by multinational corporations have sparked unease among employees in China’s technology sector. The repercussions of these workforce reductions extend beyond the impacted employees, carrying broader implications for the industry and the economy. As the situation continues to evolve, it is crucial to monitor the developments and assess the potential long-term effects on the workforce and the market.