BEIJING (BLOOMBERG) - Hiring by China's technology companies plummeted by a fifth in 2018's final quarter as the nation's largest corporations grappled with mounting economic uncertainty, according to a study of national job ads released on Friday (Jan 18).
The number of IT and Internet positions advertised nationwide fell by 20 per cent in the December quarter compared with a year earlier, according to a report from Renmin University and the country's largest jobs website, Zhaopin. The drop was most pronounced in the Internet and online gaming sectors, where ads slid 23 per cent and 30 per cent, respectively.
A high-paying job in technology has long been a coveted role. But the ongoing trade war with the United States, coupled with a slowing economy and an unprecedented crackdown on online content, has forced many companies to curtail hiring.
While the overall decline in vacancies posted was an improvement on the third quarter's 51 per cent, it reflects a wider malaise and fears that the economic slowdown is here to stay.
Last year marked the first time China's giant IT and Internet sector - led by Tencent Holdings and Alibaba Group Holding - has cut back on job ads since 2015, the study showed.
"The changing macroeconomic situation, a stream of regulatory improvements and the end of easy profit generated from large traffic volumes have ended the monstrous growth of the Internet industry and has gradually returned it to a more reasonable level," the report said.
"New Internet companies need to innovate to find new areas of growth."
The study by the China Institute for Employment Research, a venture between Zhaopin and Renmin University, is based only on ads on Zhaopin's site and doesn't include headhunting or other forms of private recruitment.
Still, the sustained slide in employment ads is a worrying sign, given the industry's prominence in China's plan to move away from traditional industries like steel and into higher-value services.
Beijing has long hailed its fast-rising tech giants as proof of both the country's growing prowess and its ability to move up the value chain.
Economists see Chinese growth slowing to an annual pace of 6.2 per cent in 2019, the weakest pace since 1990. Car sales dipped for the first time in 28 years, and the growing trade tensions between the US and China have likely played a part in hurting consumer and business confidence.
That in turn is pressuring tech: Alibaba has warned that a slowing economy is likely to affect sales across their platforms.
Beijing also played a role. The country has faced the biggest digital crackdown in history over the past year or so, with everything from games to streaming platforms censored and sometimes banned.
A sudden freeze on game licences threw the industry into disarray and slashed US$200 billion from Tencent's value at one point. Approvals resumed in December, which might have brightened sentiment and encouraged hiring in the fourth quarter, the institute said.