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NetEase, a major player in the Chinese gaming industry, has been the subject of rumours regarding large-scale layoffs. The company’s response to these rumours is crucial for understanding the potential impact on its employees and the industry as a whole. Since the beginning of this year, there have been several reports of layoffs among tech companies. While some of these reports are true, others turn out to be mere rumours. NetEase had to officially respond to the rumours of large-scale layoffs within the company. The company stated that the rumours were not true. It also explained that the company is only integrating internal resources and it is not laying off its employees.
Background
According to Jiemian News, NetEase has started to lay off employees in multiple businesses since December. The report claims that the hardest hit area is NetEase Media, and the game department is also involved. Another similar report states that NetEase Media’s large-scale layoffs mainly started in January. The report claims that it involves multiple product lines such as NetEase News, NetEase Cultural Creativity, and NetEase Open Classes, including content, marketing, sales, product and other positions. Also, the report mentioned that the proportion of layoffs in various businesses and departments is not consistent. There were rough estimates that it is “between 10% and 50%.”
A few weeks ago, there were also reports that NetEase Media has given an “N+1” compensation package, and laid-off employees will also receive year-end bonuses and 13% salary. A resigned employee revealed that the layoffs began in December and involved not only ordinary employees at the executive level, but also management staff, but there was a time sequence. However, it is good to note that the employee making the statement resigned and was not laid off.
Then, last week, we got reports that NetEase’s other businesses began laying off employees at the beginning of the year. Among them, the layoffs in the game business are mainly targeted at product, operation, marketing and other positions, and the compensation plan is “N+3”. In addition, some project teams have provided employees with two options: layoffs and job transfers. However, the report claims that the latter is mostly for out-of-town positions and there is not much space.
NetEase’s Official Response
From the background above, you will agree that there have been a lot of reports about NetEase layoffs. However, NetEase insiders had to respond to the rumours about layoffs at the company. NetEase insiders said that the news is untrue. They said that some people resigned and some relocated and this is due to the company’s normal business adjustments and personnel movements. They further stated that at the moment, the company is still recruiting high-quality talents.
Gizchina News of the week
NetEase revealed that to promote healthy business development, some of NetEase Media’s business lines have recently integrated internal resources. This integration means that some departments were moved to other cities while some teams were merged into a department in a new location. For this reason, a few employees resigned. Some didnt want to relocate or change location while others didnt want to be subordinated having lead teams for some time. NetEase stated that in the future, the media will continue to increase its content track and explore content empowered by new technologies such as AIGC and Metaverse.
Regulatory Environment and Stock Market Reactions
The regulatory environment is one of the major reasons why NetEase had to merge departments or teams. In recent years, China has implemented various regulations affecting the gaming industry. These regulations have targeted in-game spending, daily rewards, and the approval of online games. For instance, a new set of rules has been introduced to reduce spending and in-game rewards, leading to a significant decline in the stock prices of major game companies like Tencent and NetEase. The regulatory changes and government intervention have caused speculation and concerns about the future of the Chinese gaming market.
Amidst these regulatory developments, the stock prices of NetEase and its competitors have experienced significant fluctuations. For example, shares of NetEase rose after the easing of China’s gaming crackdown. However, the company, along with other game companies, has also faced stock price declines due to the new gaming regulations and government intervention.
With these regulatory changes in place, it becomes harder for NetEase to run multiple independent teams or departments. As the new laws decline its stock prices, the company is trying to adjust to ensure that its finances remain stable. This is a reasonable that that almost every company will do to stay afloat.
Final Words
In conclusion, the Chinese gaming industry, including companies like NetEase, has been navigating a challenging regulatory environment, which has had a notable impact on stock prices. The response of NetEase to the rumours of large-scale layoffs will be a significant development to monitor. It provides insights into the company’s strategic direction and its approach to the evolving regulatory landscape. The company says it is not laying off employees but only merging teams and departments.
Author Bio
Efe Udin is a seasoned tech writer with over seven years of experience. He covers a wide range of topics in the tech industry from industry politics to mobile phone performance. From mobile phones to tablets, Efe has also kept a keen eye on the latest advancements and trends. He provides insightful analysis and reviews to inform and educate readers. Efe is very passionate about tech and covers interesting stories as well as offers solutions where possible.
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