(Yicai Global) Feb. 28 -- NetEase has confirmed media reports that the Chinese tech giant is carrying out widespread lay-offs. The move follows a fall in net profit for last year.
NetEase has been conducted organizational adjustments since the Chinese New Year holiday with some departments cutting almost half of their workforces, the Hangzhou-based firm told China Entrepreneur, a tech news outlet under state-backed Economic Daily.
Dismissals are focused on its e-commerce unit Yanxuan and farm produce-related brand Weiyang, as well as its educational segment and other businesses such as public relations. The firm has separated Yanxuan from its e-mail division while education has been split from NetEase's Hangzhou Institute. The PR team has been separated from marketing.
This is an abrupt adjustment, according to one employee, adding that the company has not given any specific reason for this round of cuts. Some colleagues that had been promoted before the holiday were shocked to be laid off when they returned to work, he added. Some others took up their posts just one week after Chinese New Year, only to be let go two weeks later.
Yanxuan started its layoffs before Chinese New Year, cutting 30 to 40 percent of its workforce, while Weiyang also started before the holiday with close to 50 percent of the team already gone. The educational product division aims to reduce its workforce by one-third to less than 200 employees. The PR team will cut 40 percent of staff, according to another employee.
NetEase's stock price has been under continuous pressure since last year especially regarding the growth of its online and mobile games segments. The firm's market capitalization fell one-third in 2018.
The company has scaled back its main business as well as non-core segments. Its freemium music streaming service NetEase Cloud Music will reduce spending this year and buy fewer copyrights from Tencent Music, Beijing-based magazine Caijing reported a company insider as saying.
Editor: William Clegg