Concerns are mounting among Chinese office workers as technological advances, particularly in artificial intelligence (AI), prompt fears of job displacement and large-scale corporate restructuring. Recent rumors about extensive layoffs at leading firms like Meituan have reignited anxiety among employees across the country’s tech sector, despite public denials from some companies.

Last month, speculation swept through Chinese social media suggesting that Meituan, a major food delivery platform, intended to reduce its product-related workforce by up to half by the end of June. Although the company dismissed these claims, internal sources and employees conveyed a growing unease about ongoing “optimisation” efforts—a euphemism widely used in China to describe workforce cuts framed as organisational restructuring. This year, the term has taken on a new dimension, with many workers worried not only about performance evaluations but about whether their roles can be performed by AI systems.

This concern is not limited to Meituan. Industry insiders report that other prominent technology companies, including Baidu and Xiaomi, have also been downsizing. The accelerating adoption of AI, including tools capable of writing code, conducting research, and managing complex business tasks, is reshaping the skills landscape. Even traditionally secure roles, such as software engineers, face challenges as AI-generated coding becomes routine. For example, Tencent executives revealed that the majority of code written this year was produced by AI, with human engineers shifting focus to supervision and system design rather than hands-on coding.

Recruitment standards have evolved accordingly. Employers increasingly demand “AI fluency” and versatile full-stack engineering skills, often expecting candidates to work alongside AI tools to cover multiple functions. This shift creates hurdles for recent university graduates and less experienced workers, who compete against AI agents that can perform tasks efficiently and without employment costs.

Economists warn the labor market impact of AI could disproportionately affect younger and older workers. Cai Fang, a Chinese Academy of Social Sciences member, cited data indicating that middle-aged workers tend to maintain more stable employment, while youth and seniors face heightened vulnerability. China’s youth unemployment rate, although slightly decreased, remains elevated at 15.6 percent for those aged 16 to 24, with over 12 million university graduates entering the job market this year.

While some blame AI directly for layoffs, others urge caution. Veteran AI developer Tuxi contends that recent cuts reflect long-standing over-expansion in tech firms, with AI serving as a convenient rationale rather than the sole cause. Similarly, Nvidia CEO Jensen Huang cautioned against attributing job losses exclusively to AI adoption, attributing cuts instead to prior over-hiring and the high costs of AI development.

Chinese tech giants are also reallocating resources aggressively toward AI. ByteDance has significantly increased its AI infrastructure investment, surpassing earlier budget plans, and has consolidated business lines to refocus on AI-driven products. Meituan and Alibaba have implemented staff reductions in certain divisions even as they continue to expand teams dedicated to AI research and development.

At the government level, Beijing has introduced policies aimed at mitigating the social risks of AI-driven change. The State Council’s “AI-Plus” action plan emphasizes skill training, assessment of AI’s employment risks, and support for innovation in job-creating sectors. Labor courts have also begun addressing AI-related dismissals, as exemplified by a Hangzhou ruling rejecting a company’s termination of an employee replaced by AI due to cost considerations.

Despite these interventions, uncertainty persists among workers. Meituan employees report ongoing “optimisation” through gradual staff adjustments rather than sudden large-scale layoffs. This cautious approach reflects broader market dynamics, where AI-driven productivity gains coexist with immediate labor market disruptions.

As companies navigate this transitional period, economists stress the importance of targeted investment in workforce adaptation to ensure technological progress translates into broadly shared economic benefits, cautioning that without such measures, AI risks exacerbating income inequality and regional disparities.