BEIJING: Chinese Internet companies, including Alibaba Group Holding Ltd, Tencent Holdings Ltd and JD, are reportedly downsizing, amid economic downward pressure and a complex external environment, but they are still stepping up recruitment efforts for skilled talent in research and development.

       Industry experts said tech heavyweights are adjusting development strategies, optimising organisational structure and shifting their focus to operational efficiency-oriented business model, with an emphasis on long-term, sustainable growth.

       Jingxi, a social eCommerce platform under Chinese e-commerce giant JD, plans to lay off 10% to 15% of its workforce, according to JD.

       Launched in 2019, Jingxi focuses on lower-tier cities and townships, providing coupons and incentives on team purchases to target users.

       The planned layoffs are mainly concentrated on Jingxi Pinpin, a community group-buying platform of Jingxi, and some employees will be moved to other businesses, JD said, while noting its main business will not be affected.

       JD reported a net loss of 5.2 billion yuan (US$817mil or RM3.44bil) in the fourth quarter, compared with a net profit of 24.3 billion yuan (RM16.08bil) in the same period in 2020. Losses from JD’s new businesses, including Jingxi, stood at 3.22 billion yuan (RM2.13bil) in the fourth quarter.

       “JD’s goal is not to chase high growth in single operating financial metrics. In fact, we focus on healthy and sustainable growth of our business as a whole,” Xu Lei, president of JD, said during the company’s earnings call.

       “As China’s Internet industry develops into a more mature stage, the traffic-driven growth model buoyed by subsidies is being replaced by the use of quality and operating efficiency-oriented models,” Xu said.

       The JD layoffs came after media reported tech behemoths Tencent and Alibaba are preparing to shed tens of thousands of jobs this year in one of their biggest layoff rounds.

       Alibaba could cut more than 15% of its workers, while Tencent plans to lay off employees in some of its business units this year, according to a report from Reuters. The two companies did not immediately respond to requests for comments.

       Ouyang Rihui, assistant dean of the China Center for Internet Economy Research at the Central University of Finance and Economics, said Internet companies have started to adjust their diversified operational strategies and gradually concentrate on some core businesses and look for new profit growth points amid the country’s strengthened supervision over platform-based economy and efforts to prevent the disorderly expansion of capital.

       He said these companies should accelerate steps to promote the in-depth integration of digital technologies with the real economy, empower small and medium-sized enterprises and pour more resources into technological innovation. — China Daily/ANN