Alibaba’s workplace collaboration app DingTalk has been at the center of layoff discussions on Chinese social media this week. Some people indicated the platform faces a massive 30% job cut, while others suggested a standard organizational adjustment that affects less than 10% of the staff.
Why it matters: Chinese tech companies have seen rounds of layoffs over the past few months. The downsizing conversation of one of Alibaba’s major business lines is another sign of stress within the Chinese tech community.
- Alibaba and Tencent currently lead the country’s workplace app market with DingTalk and WeCom.
Details: Talks of DingTalk’s layoff started circulating on Chinese social media on Thursday. The workplace app will reportedly cut less than 10% of its employees this year, according to a widely circulated comment posted on China’s LinkedIn-like platform Maimai. The user, who identified himself as an Alibaba employee, said on the platform that the cut will be 10% of the staff (in Chinese), rather than 30% previously circulated on the platform (in Chinese), which would have been the largest layoff for an individual Alibaba unit this year.
- A 10% cut is considered within the normal range of an organizational adjustment for DingTalk, according to Chinese media outlet 36Kr (in Chinese), citing unnamed DingTalk staff. The 36kr source said DingTalk removes around 4% to 10% of low-performing employees annually. This year’s headcount change is looking to be similar to previous years after DingTalk removed 6% of low-performing employees and some people left voluntarily in 2021, the source added.
- DingTalk announced a series of strategic changes in March as the company prioritizes its transition to a platform-as-a-service (PaaS) business. DingTalk will focus on developing key features in core collaboration and productivity functions, such as file-sharing, project management, and video call. Meanwhile, the platform will leave other tasks to third-party developers and partners, such as hardware and industry applications.
- The company didn’t respond to TechNode’s inquiries on the matter when contacted on Friday morning.
Context: Chinese productivity apps are hoping to commercialize their services after investing heavily into the market’s pandemic-driven boom since 2020.
- DingTalk launched paid versions in March, while ByteDance reportedly aims to accelerate the commercialization of its workplace communication app Lark, aiming for a global revenue goal of RMB 6 billion ($940 million) by 2026.