Why Big Tech Companies Simultaneously Lay Off and Hire: Insights into Internet Industry Dynamics

Recent layoffs have been reported at major Chinese internet giants such as JD, Tencent, and Baidu, while at the same time companies like Tencent and Alibaba announced historically large hiring plans for 2022, creating a seemingly paradoxical situation.

1. Internet business uncertainty – The internet sector is asset‑light and heavily reliant on talent, with strong network and Matthew effects. Successful products can generate massive value with very few employees (e.g., Douyin’s early growth), prompting firms to launch dozens or hundreds of product lines and hire extensively. When exploratory projects fail, large‑scale layoffs follow.

2. Personnel redundancy – Middle‑level managers in big tech often expand their teams to secure influence, leading to over‑staffing. They compete for projects, recruit many subordinates, and produce abundant PPTs, which inflates headcount. When the market cools, these redundant positions are the first to be cut.

3. Continuous influx of fresh graduates – China is experiencing a talent dividend with millions of new university graduates each year. Companies favor hiring them because they are cheaper, easier to train, and more likely to develop strong corporate loyalty, while older employees face higher layoff risk.

The combined effect is that senior staff are frequently downsized while fresh talent is in high demand. The article advises individuals to build core technical or professional competencies, adopt a “bottom‑line thinking” mindset, and prepare for economic cycles by managing personal finances and career development proactively.