Chinese tech firms including Alibaba and Tencent have announced plans to trim workforces or reduce new hires
the year grows cold do we see the qualities of the pine and the cypress,” wrote Robin Li, the boss of Baidu, in a new year’s letter to staff at China’s main online-search firm. It was yet another recognition of a chill sweeping through the country’s technology industry. The lavish financing that promising startups have come to expect has dried up. Job cuts have multiplied. Even China’s tech giants have not been spared and are slashing bonuses and travel expenses.
Startups looking for early-stage investment have felt the capital winter most keenly. Yuqing Guo, a partner at, a consultancy, says investors are advising them to expect as little as half the valuation they might have won a year ago. Where once investors brandished term sheets before a startup had launched, now they wait. Deals are taking longer: a round of funding once raised within a month is taking six, says Nisa Leung of Qiming Venture Partners, a big investor in Chinese tech.
Other peppy online businesses have been hurt by tighter censorship, as the Communist Party intrudes ever more noticeably into China’s technology sector—whether by requiring the shutting down of a popular jokes app, or by announcing that Jack Ma of Alibaba, its best entrepreneur, is a party member. Meanwhile, internet firms are having to look for new ways to attract users and sources of revenue.
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