NetEase, China's second-largest provider of online games with a growing e-commerce segment, is releasing a significant number of its employees and completing a list of Chinese tech giants who have laid off staff after the new lunar year.
A NetEase employee recently released confirmed with TechCrunch that the company had fired a large number of people in several departments, including e-commerce, education, agriculture (yes, founder and managing director Ding Lei has a cause for organic farming) and Public Relations, although downsizing at Yanxuan, their e-commerce brand that sells online and offline branded goods, had begun before the Lunar New Year celebration.
Several Chinese media concerned the dismissal on Wednesday. According to a report by Caijing Magazine, Yanxuan has laid off 30-40 percent of its employees; The agricultural brand Weiyang has been cut by 50 percent. the educational unit was reduced from 300 to 200 employees; and 40 percent of NetEase's public relations workforce was gone.
A spokesperson for NetEase refused to dismiss TechCrunch's dismissal questions, but said the company "is actually undergoing structural optimization to narrow its focus" "to boost innovation and organizational efficiency, so that NetEase can fully exploit its own strengths and adapt to the competition in the longer term. "
Oddly enough, ecommerce and education seem to be some of the lighter parts of NetEase. The company highlighted it alongside Music Streaming during its recent win bid. The three sectors saw "strong earnings growth potential" and "will be the focus of the next phase of strategic growth [the company’s]." an urgency to tighten the purses for even the rosiest shops of NetEase.
The transition fits in with market speculation about job cuts to save costs as China copes with a weakening domestic economy. JD.com, a rival to Alibaba, fires 10 percent of its senior management to cut costs, Caixin reported last week. Didi Chuxing, the Ride hail, plans to lay off 15 percent of its staff this year to increase internal efficiency, although new members join to focus on more promising segments.
Alibaba took an unexpected turn and announced last week More talents will be hired in the coming week. "We are ready to provide our platforms with more resources to help businesses navigate the current environment and create more employment opportunities overall," the company said in a statement.
2018 is a tough year for China's gaming companies of all kinds. The industry got hit after regulators frozen all approval approvals to reshuffle and push down equity prices of big companies like Tencent and NetEase. These companies continue to feel confident after the resumption of approvals as the newly established regulator imposed stricter game controls, slowed down the overall application process and delayed companies' plans to monetize lucrative new titles.
This bleak domestic outlook forced NetEase to call Ding a "two-legged" game-publishing approach, with one foot in China and the other overseas. Tencent has also found new channels for its games through regional partners such as Sea & # 39; s Garena in Southeast Asia.
Founded in 1997, NetEase earned its name through the creation of PC games and the provision of e-mail services in the early years of the Chinese Internet. More recently, the company wanted to diversify its business by running projects across the board. In the areas of music streaming and e-commerce (which allegedly swallowed the imported service of Amazon China), it has so far experienced growth, while retiring from other providers such as the comic book publisher. This asset is sold to the youth-oriented video streaming site Bilibili.