Three Reasons Why the Chinese Internet Company Hit by Job Cuts

Didi Chuxing has nixed free snacks and gym membership. ByteDance shrank its Chinese new year bonuses from 16K RMB to 3.6K RMB, Other Chinese technology companies are axing staff, fruit bowls, and travel perks. For employees — like investors— times are tough.

The internet economy began to decline in China, and companies that had previously expanded excessively, or those where business models were not sustainable, began to experience a cold winter, with layoffs becoming one of the main means by which many companies could cut back on costs.

Here are a few reasons why the austerity bites happened

First, many people do not realize that the essence of the Internet is a tool, the meaning of the existence of tools is to improve production efficiency, so tools must be bundled business to reflect value, separate tools do not make sense, internet companies are the same, only talk about the various models of the internet simply do not have values.

China Internet companies cannot spontaneously produce the transaction of the Internet business model, the early start of the burning money expansion has long been riddled with financing to survive, now the economic downside capital shrinkage, capitalists are fending.

Second, the outbreak of the Internet rapidly improving the efficiency of social operation, you know, any rapid growth can mask all the contradictions and risks in the development process, just like 2015 of the stock markets, 2016 of the housing markets.

But only cover up, contradictions and risks still exist, once the original upward increment stagnation or negative growth, in the overall whereabouts of the process, the original existence of risks and contradictions on the complete naked exposure, as a tool of the nature of the Internet in the overall economic decline channel, how to prove that they can enhance the production efficiency of traditional industries, It is the Internet enterprises to live to ponder the right way, but also in the study of the sideways circle of money under the various PPT packaging companies are destined to be killed by themselves sooner or later.

Third, any industry development changes are not just saying, if you understand the law of economic development, then more or less to understand the situation, 2018 this year’s financial industry, the entertainment industry has been restricted by the government, Chinese government shouting for a year: To serve the real economy! Go to the real!