Chinese delivery giant Meituan axes jobs at core departments as lay-offs in tech sector deepen
- Up to 20 per cent of Meituan’s staff in core business units, including food and grocery deliveries have been affected
- The lay-offs come just a few days after Meituan informed the internet regulator that it had added a net 17,000 jobs from July 2021 to mid-March 2022
Meituan’s lay-off plan covers its core business units, including food and grocery deliveries, restaurant reviews, hotel reservations, community buying and financial services, two people familiar with the situation told the South China Morning Post.
Meituan did not immediately respond to a request for comment. The information from the sources, who declined to be named, confirmed an earlier report on Chinese media Caixin. According to the report, about 10 to 20 per cent of the staff at these business units were to be fired.
The redundancies comes in the wake of Meituan’s announcement that it had added a net 17,000 jobs from July 2021 to mid-March 2022. Meituan is one of the 12 Chinese internet companies which have been asked to brief the Cyberspace Administration of China (CAC) about their workforce situation during the period, after stories of sackings by former employees mushroomed on the internet.
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According to a statement from CAC on Friday, the 12 platforms, including Alibaba Group Holding, Tencent Holdings and Meituan, actually created net jobs during the period. While they jointly let go of 216,800 workers, they also hired some 295,900.
The regulator’s statement comes amid growing concerns that Beijing’s ongoing harsh crackdown on the tech sector has damaged the sector’s growth outlook and consequently job creation.
In China, it is rare for a company to announce mass lay-offs as this would lead to intervention from the labour authority and hurt their reputation. Instead, lay-offs are conducted in the guise of business optimisation and restructuring. The explanation given by some companies to employees who have been laid off is that they have “graduated”.
Meituan’s lay-offs notification was issued to affected people last week, with some calling it a “mysterious blitz”, according to Caixin. According to the report, some were informed on Friday afternoon and had lost their access to the company’s internal communication platform by evening.
The two sources told the Post that the fired staff have been compensated based on the number of years they had served the company, plus one month’s salary.
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The company said in February that it would hire 10,000 fresh graduates including interns as part of its recruitment spree. On Monday morning alone, Meituan had posted nearly 300 positions, ranging from user growth to algorithm and sales to supply chain, on its website.
Shares of the Hong Kong-listed company were 5.2 per cent lower at HK$148.30 in Monday afternoon trading.
