Bloomberg Businessweek - USA (2019-10-14)

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DATA: ZHAOPIN

hiringhasslowed:Jobpostingsintheinternet

ande-commercesectordroppedabout13%inthe

secondquarter,accordingtorecruitmentplatform

Zhaopin.Entrepreneursarelesswillingtoformven-

tures,sothepaceofstartupcreationhasslowed.

Thetacitpromisefor workersinthecoun-

try’snotoriouslyrelentlesstechculture—putin

thehoursandgetrichquick—nolongerholds.

Foryears,techworkersinChinahaveaccepteda

scheduledubbed996—9a.m.to 9 p.m., six days a

week, plus any overtime required—in return for

wealth they’d watched so many before them gain.

Many were willing to take meager wages, around

$2,000 a month in Hu’s case. They’ve now discov-

ered that such blind loyalty doesn’t always pay off.

In March a horde of mostly anonymous Chinese

programmers took to the code-sharing community

GitHub to protest 996. They compiled a blacklist

of companies known for not paying overtime and

lodged formal complaints against their employers

to local labor watchdogs. Their post went viral, gar-

nering almost a quarter of a million followers.

Some of China’s most prominent industry fig-

ures pushed back. Alibaba’s billionaire founder Jack

Ma endorsed the extreme work schedule, calling

the ability to work 996 “a huge bliss” for workers in

an April internal meeting with employees. Richard

Liu, chief executive of Alibaba competitor JD.com

Inc., said in a WeChat post that while he wouldn’t

force employees to work 996, people who slack off

weren’t his “brothers.”

China’s Communist Party has been grappling

for months with foreign threats to the country’s

tech sector. In May the U.S. banned telecom equip-

ment giant Huawei Technologies Co. from buying

American components, and other Chinese tech

companies fear a similar fate. Mounting discontent

among tech workers could hamper the industry’s

growth, creating yet another headache for the gov-

ernment. “Facing a more difficult payoff, China’s 996

workers may lose enthusiasm,” says Brock Silvers,

managing director for Shanghai-based investment

firm Kaiyuan Capital. “This is precisely contrary to

the needs of China’s developing tech sector.”

Suji Yan, the 23-year-old founder of Shanghai

data privacy firm Dimension, says the younger gen-

eration values work-life balance, and he allows his

20-person team to keep flexible hours and work

remotely across the globe. He thinks it could take a

decade or two to fix China’s intense work culture.

With their dreams of getting rich shattered, “pro-

grammers have more and more realized that they

are just ordinary laborers, ones that belong to the

same class as food delivery guys and are as misera-

ble as them,” Yan says.

Duringthecountry’slasttechdownturnin2016,

companiesfrozehiringandcutjobs,andmany

weretoldtorewritevaluations,reassessassets,

andslashcosts.Thisledrisk-averseinvestorsto

pourmoneyonlyintomarqueecompanies,push-

ingupvaluationsforthecountry’slargeststartups

andusheringtheriseofa fewtechbehemothsthat

tookcontrolofalmosteverything.Thistimeeven

thehotteststartupsfeelthepain.SoftBankGroup

Corp.-backedFullTruckAlliance,anappfortruck

deliveries,scrappedplanstoraiseasmuchas$1bil-

lion,whileartificialintelligencestartupSenseTime

GroupLtd.saysit’sina “nondealroadshow”with

nofundingtargets,monthsafterit wassaidtohave

heldtalkstoraiseabout$2billion.Ride-hailinggiant

DidiChuxinginternallydisclosedplanstocut15%

ofitsworkforceearlierthisyear—thoughit intends

tohireincertainareas—whileonlineemporium

Alibabawassaidtohavetemporarilyhaltedhiring.

At the social networking company where

CherryWangworks,overcrowdingusedtobethe

norm,andthereweren’tenoughdesksforevery-

one.Nowrowsofdeskslieempty,andtheprod-

uctmanagerhaswatchedco-workerspacktheir

belongingsonFridaysandleave,nevertobeseen

again.About10%ofemployeeswereeliminatedat

theendoflastyear,shesays,askingthatthecom-

pany’snamenotbedisclosedsoshedoesn’tlose

herjob.Wanghadbeenaccustomedtoanannual

bonusofatleastthreemonths’salary.Thisyear?

“You’reluckynottogetlaidoff,”shequotedher

managertellingherduringa recentevaluation.

VickyRen,26,is gratefultonolongerhaveto

endurethelonghoursexpectedbyChinesetech

companies.Aftergraduatingcollegein2015,Ren

becameoneofthecountry’smillionsof“Beijing

drifters”—peoplewhomigratetothecapitalin

searchofopportunity.Shespenttwoyearsasa

marketingspecialistwitha Chineseinternetcom-

pany.Afterrelocatingabroadtohelpthecompany’s

expansioninSoutheastAsia,Rengrewfrustrated

bytheendlessback-and-forthwithheadquartersin

Chinaandthelonghours—itwasn’tunusualforher

toleavetheofficeaslateas 10 p.m.Underpaidand

overworked,sheresignedinMay.She’ssincefound

a jobwitha U.S.gadgetsseller,wheresheearns

30%moreandworksfrom 10 a.m.to 6 p.m. She

says she’s more fulfilled and employees are encour-

aged to complete their tasks during regular office

hours. “Everyone here,” Ren says, “thinks working

overtime is embarrassing.” �Lulu Yilun Chen and

ZhepingHuang

● Change in job

postings in China from

Q2 ’18 to Q2 ’19

Hotel

and

dining

-1 .7 %

Logistics

-5.5%

Retail

-7.4%

Travel

-10.2%

IT

-13.3%

Finance

-37.0%

THE BOTTOM LINE Tech funding is drying up as China’s economy

slows amid a trade war with the U.S. Worker discontent threatens

the sector’s model over the long term.

◼ TECHNOLOGY Bloomberg Businessweek October 14, 2019