Baidu, China’s largest search engine operator, has reportedly started large-scale layoffs this week affecting multiple business units. Citing sources familiar with the matter, news agency Reuters reported that the cuts are expected to run until the end of the year. The move comes shortly after the company reported a disappointing third-quarter loss. The report also says that the layoffs are internally perceived to be significant.While the number of job losses could not be immediately established, Reuters cited two sources as saying that the layoff ratio may reach as high as 40% for some teams, depending on performance and business unit.
Why Baidu is cutting jobs
The job reductions are said to be driven primarily by financial strain and intensifying competition in both core advertising and the burgeoning AI sector. Baidu reported the second straight quarterly revenue decline, with total revenue falling 7% year-over-year in the third quarter. The company posted a net loss of 11.23 billion yuan ($1.59 billion) for the period.Furthermore, Baidu’s core online advertising revenue, which provides the majority of its income, saw an 18% drop in the third quarter. The company’s workforce stood at 35,900 at the end of last year, continuing a multi-year trend of headcount reduction from a peak of 41,300 in 2022.It has also been reported that the cuts will not be distributed evenly. Reuters says that the mobile ecosystem group (MEG) is expected to bear the brunt of the staff reductions. Moreover, roles tied to AI development and cloud computing will largely be shielded.Baidu’s Ernie large language model is said to be struggling to maintain its early lead against offerings from rivals, including Alibaba and the AI start-up DeepSeek. Adoption of the Ernie Bot app has reportedly lagged significantly, recording 10.77 million monthly active users in September, far lower than the 150 million users reported for ByteDance’s Doubao.
