JD.com to fire underperforming senior managers as China’s tech lay-offs extend to executive suite

China’s winter chill has reached the executive suite, with the country’s second largest e-commerce player confirming reports that it will fire underperforming senior executives after several Chinese technology companies moved to cut rank and file staff in recent weeks amid the slowing economy.

JD.com said it plans to lay off 10 per cent of its management at the vice-president level and above in 2019, using the “rank and yank” approach. This strategy usually forces department heads to identify and fire their least productive staff.

“JD.com is now carrying out the ‘small group, big business’ transaction, aimed at revitalising resources and giving full play to organisational vitality to ensure achieve quality growth,” the company said in a statement on Tuesday, confirming earlier media reports about the lay-off plan on Tuesday.

Rumours about tighter hiring practices in China’s tech sector began to swirl at the end of 2018 amid cooling valuations for start-ups, tighter market conditions for private enterprises and a shrinking pool of venture capital funds.

Competition for job vacancies is intensifying with an average applicants-to-jobs ratio of 32 to 1, according to a talent supply and demand report released by job site Zhaopin in January.

Chinese ride-hailing services giant Didi Chuxing last week said it will eliminate about 2,000 jobs, kicking off one of the biggest rounds of cutbacks in China’s technology sector.