China’s start-up boom has come to an end: Employees are upset about the “996” working culture, small companies lay off employees for running out of capital, big companies like Alibaba temporarily hiring

Now, a generation of Chinese technology workers is facing a new reality, as the industry has experienced the sharpest decline since the 2008 financial crisis. China has spread and the trade war with the US has “quenched” the start-up boom in the country.

The start-ups in turn fired employees because … out of capital

Terry Hu worked at a game development start-up in Beijing. The first time he felt the trouble was when the boss no longer showed up. After that, free storage for users – including gift cards, toys, also out. The company’s founder finally stated that funding for the company was exhausted.

Later, Hu and about two-thirds of his colleagues were fired, he shared. Hu said and refused to disclose the company name: “He said we were the best, brightest people, that we could go back to work someday. That’s really bullshit. ”Hu took 3 months to find a job at the English center, not related to the technology field that was so attractive. He said: “I learned a lesson.”

Now, a generation of Chinese tech workers is facing a new reality as the industry has experienced the sharpest decline since the 2008 financial crisis. The nation’s spread and the trade war with the US have “quenched” the start-up boom in the country. Big players in China currently only raise $ 32.5 billion through venture capital deals as of 2019, compared with $ 111.8 billion last year, according to data from Preqin.

Accordingly, the unemployment rate increased and recruitment activities also slowed down. According to recruitment platform Zhaotin, job postings in the internet and e-commerce sectors fell by about 13% in the second quarter. In addition, the trend of establishing joint ventures of entrepreneurs is not as enthusiastic as before, so the pace of start-up development has stagnated.

The employee is discouraged because the work intensity is too great

The promise of a future for workers in a non-stop working culture in the country – working hard and you’ll get rich quick, doesn’t work anymore. For many years, employees of Chinese technology companies have accepted the “996” schedule (working from 9 am to 9 pm, 6 days a week and doing extra work whenever required) , to get the money they’ve been longing for. With the goal of fulfilling the dream, many people are willing to accept meager salaries, as in the case of Hu is 2,000 USD / month.

Now, they have found that such blindly loyalty is not always paying off. In March, a group of Chinese developers went to GitHub to protest the “996” culture. They have blacklisted companies that do not pay employees for overtime and send complaints about their companies to local labor supervisory agencies. Their post quickly spread, attracting a few hundred thousand followers.

Some of the most famous entrepreneurs in this industry disagree. Specifically, during an internal meeting in April, Alibaba’s founder, Jack Ma, still supported the “996” schedule, saying that it was a great happiness for workers. Richard Liu, managing director of JD.com, wrote in a WeChat post that while not forcing employees to work on the “996” schedule, those who opposed it were no longer “brothers.” with him.

Cherry Wang, a product manager at a social networking company, said she used to be very crowded in the past, not even having enough desks for everyone. Currently, the rows of tables are empty, she witnessed colleagues packing and leaving Friday. Wang said about 10% of employees were laid off late last year and refused to disclose the company name.

Vickey Ren, 26, is “breathing” because not endure endless hours of work as technology companies expect. After graduating from university in 2015, Ren became one of the millions of “wanderers” in the country – immigrants who come to the capital to find work. She worked as a marketing specialist for 2 years at an internet company. After moving abroad to assist the company with the expansion project in Southeast Asia, Rew became frustrated by having to move too much between headquarters for a long time and often left the office at around 10 dark time In May, she decided to quit her job here because of the unworthy salary and work overload.

Ren said, since finding a job at an American equipment store, she earns 30% higher than the old position, only working from 10 am to 6 pm. She said she feels everything is more complete and employees here are encouraged to complete their work during office hours. Ren said: “Everyone here thinks that working overtime is ominous.”

The “headache” of the Chinese government

The Chinese government has been struggling for months, in the face of threats from its domestic technology industry. In May, the US banned Huawei from buying U.S. parts and other Chinese tech companies feared a similar ban. Another “headache” for the government is that technology industry discontent can hinder the sector’s momentum.

Brock Silvers, chief executive of Kaiyuan Capital, an investment firm, said: “Facing unworthy compensation, Chinese ‘996’ employees may lose their enthusiasm for work. This is in stark contrast to the needs of the growing technology industry in China. ”

Suji Yan, 23, is the founder of data security company Dimemsion in Shanghai. Yan said the younger generation values ​​the balance between work and life. Therefore, he allows his 20-person workgroup to have flexible working time and work remotely from many parts of the world. Yan said that China’s high-intensity working culture can take 1 to 2 decades to overcome. As the young man confided, as his dreams of becoming rich broke, “developers will increasingly realize that they are just ordinary workers, in the same class as the food delivery workers and also miserable like them. ”

During the tech downturn in 2016, companies suspended hiring and job cuts, many were required to reset their valuations, reevaluate assets and cut costs. This makes risk-averse investors just pour money into big companies, pushing the valuation of the country’s most powerful startups up and facilitating the rise of a few “giants.” technology ”control almost everything. But, this time, even the biggest start-ups suffer losses.

Full Truck Alliance – backed by SoftBank, an application that provides truck delivery services, has eliminated the plan to raise about $ 1 billion. Meanwhile, SenseTime’s artificial intelligence start-up says it is in a “no-deal agreement” state, has no goal of raising capital, and months later they hold discussions to mobilize 2 billion USD. Earlier this year, ride-hailing startup Didi Chuxing revealed internally about a plan to cut 15% of its staff, while Alibaba is said to have stopped hiring.

Source : GenK