Advertisement
Coronavirus pandemic
Tech

Pay cuts but no lay-offs for now: how China’s tech firms are coping with the coronavirus downturn

  • Squirrel temporarily closed 2,000 offline schools and moved 200,000 students to online classes within 15 days
  • Uxin said in the post that it has requested that some employees take temporary leave with a ‘cost-of-living allowance’

Reading Time:4 minutes
Why you can trust SCMP
0
Commuters wearing protective face masks wait for buses at a stop in the Central Business District in Beijing, Monday, March 2, 2020. China's manufacturing plunged in February as antivirus controls shut down much of the world's second-largest economy. Photo: AP
Celia ChenandSarah Dai

For serial entrepreneur Li Haoyang, 2020 was supposed to be a year of rapid growth, with sales surging 50 to 70 per cent from 2 billion yuan (US$287.4 million) last year. Then the novel coronavirus hit.

“For many people, the impact of the epidemic is far-reaching but to companies it boils down to life or death,” the founder of Shanghai-based education start-up Squirrel AI told the South China Morning Post.

“I haven’t felt so miserable since I started my businesses,” he said. The company, which provides AI-personalised lessons through online courses and at bricks-and-mortar learning centres, temporarily closed 2,000 offline schools and moved 200,000 students to online classes within 15 days.

“In order not to be squeezed out of the industry we needed to respond quickly,” he added.

Not long ago, Li had poached Chen Guohuan, a former Alibaba executive and serial entrepreneur, to lead its operational efforts amid a newly-hatched plan to open 20,000 schools in the coming three years. Now all that is on hold.

For Li, who also ran an education institute amid the Sars outbreak in the early 2000s, the stakes this time are higher because Squirrel is a unicorn – a private business valued at more than US$1 billion.

Advertisement