According to CNBC's The China Connection newsletter, artificial intelligence is not yet prompting Chinese companies to lay off workers as aggressively as their U.S. counterparts. The report highlights that while U.S. tech giants such as Oracle are undergoing massive layoffs, the impact of AI on jobs in China remains more contained for now [1]. Several factors contribute to this difference: Beijing maintains a national employment goal, targeting a jobless rate of around 5.5% in cities, and state-directed mandates alongside lower labor costs help limit layoffs at local companies, as noted by Alex Lu, founder of LSY Consulting [1].
Salary data further illustrates the disparity between the two markets. The average monthly salary for high-demand algorithm engineers in China was 20,035 yuan (approximately $2,900), according to the online jobs platform Zhilian last month. This translates to an annual salary of about $35,000, which is nearly ten times less than the typical salary for similar roles in Silicon Valley, where a 'level 2' software engineer can earn around $300,000 in base salary. If transferred to China, such an engineer would face a 50% pay cut, according to a human resources manager at a Silicon Valley startup who previously worked at Baidu and TikTok [1].
The newsletter also notes that Chinese nationals working in the U.S. face additional challenges when laid off, as sudden job loss can threaten their immigration status. Many engineers are opting to return to China, but the transition is often difficult due to differences in work culture, including longer hours and a more competitive environment [1].
Market structure and cultural differences further influence employment trends. While work-from-home policies became widespread in the U.S. after the pandemic, Chinese companies generally require staff to work in the office. Business leaders in China tend to value overseeing large in-person teams, which also limits the impact of AI-driven job cuts [1].
CONCLUSION
AI-driven layoffs are currently less prevalent in China than in the U.S. tech sector, due to government employment targets, lower labor costs, and cultural preferences for in-person work. While salary and work environment disparities persist, the Chinese job market remains relatively stable amid global shifts in AI adoption.