Baidu starts large-scale layoffs as profits fall and competition surges
What's the story
China's tech giant Baidu has begun a massive layoff process across several business units. The move comes as the company grapples with fierce competition in artificial intelligence (AI) and falling advertising revenue. The decision was taken after Baidu reported a third-quarter loss on November 18. The layoffs are expected to continue until the end of this year.
Impact assessment
Layoff impact varies across business units
The impact of the layoffs at Baidu will vary across different business units and performance ratings. Some teams could see cuts as high as 40%. The mobile ecosystem group is likely to be the worst hit by these job cuts. However, roles related to AI and cloud computing are mostly safe from this decision, with more resources likely to be diverted toward AI development.
Workforce statistics
Workforce and financial performance
Baidu's workforce stood at 35,900 at the end of last year, down from 39,800 in 2023 and 41,300 a year earlier. The company's second consecutive quarterly revenue decline has prompted these cuts. Total revenue fell by 7% while online advertising revenue dropped by a whopping 18% in Q3. Baidu also reported a loss of CNY 11.23 billion ($1.59 billion) for the period under review.
AI challenges
AI efforts and market competition
Despite years of investing in AI, Baidu has failed to revive growth in its core online advertising business. The company has lost market share to social media platforms such as RedNote and ByteDance's Douyin. Even though Baidu was the first major Chinese tech firm to launch a ChatGPT-like service in 2023, it has struggled against competitors like Alibaba and DeepSeek.