After the Chinese New Year holiday, many Chinese netizens took to social media to complain about being laid off by state-owned enterprises and government-owned enterprises. Experts say that the surge in layoffs at these enterprises is due to economic deterioration, but the key issue lies in the reshuffling of interests in these industries by the powerful individuals, also known as “adjustment of power and interests,” which can lead to the collapse of the middle class and intensify social unrest.
Following the end of the Chinese New Year holiday, as various regions gradually resumed work, numerous netizens on social platforms posted about themselves or their friends being laid off by state-owned enterprises, with the construction industry appearing to be a particularly hard-hit sector.
On February 19, a chat record showed that China Construction Eighth Bureau is planning layoffs.
Some netizens shared videos revealing that a certain government-owned construction bureau announced in a work group that management staff would not be paid this month and that a last-in-first-out policy would be implemented. Netizens questioned why, even in a harsh industry environment, it is difficult for government-owned construction bureaus to remain unscathed, with “survival” becoming the common goal for all construction enterprises. Despite reaping substantial profits in good market conditions, why do these enterprises not provide promotions or salary raises to grassroots employees and instead demand that they share hardships during downturns? The burden always falls on the grassroots level first.
In a video message, one netizen mentioned the upcoming wave of layoffs in 2025, foreseeing the construction industry as a heavily impacted sector. In mainland China, unemployment is usually referred to officially as “being laid off.”
On February 8, a blogger named “Bright in Beijing” shared a video saying, “On the first day at work after the New Year, I received news that the company is planning layoffs. I never expected that even state-owned enterprises would lay off employees. I joined at the end of 24, barely working for a month and a half. I am considered the most likely to be laid off in our department. With the family’s expenses, my husband’s salary alone can’t sustain us. At the age of 30 plus, responsibilities with elderly parents and young children, being unemployed is truly unbearable.”
Another post mentioned working for a government-owned enterprise and receiving a layoff notice with three options: accept compensation and be laid off, switch from a labor contract to dispatch without receiving annual enterprise bonuses, or work for the minimum wage and find employment elsewhere. These three options left the individual uncertain about which to choose, as they didn’t want any of them.
Blogger “Scholar Roll” posted a video sharing their surprise that finding a job in 2025 is even more challenging than in 2024. A friend from Zhejiang University mentioned that their entire department was laid off. Having worked for this state-owned enterprise since graduation, they thought it was a stable job, but being instructed to find new employment within 30 days left them in shock. This netizen stated that no one expected the job stability of state-owned enterprises to be so uncertain.
The blogger stated that starting from 2024, there have been numerous reports of layoffs in state-owned and government-owned enterprises. For example, Southern Power Grid underwent restructuring, directly eliminating several departments. Additionally, a state-owned bank canceled 60% of its expansion plans, and graduates recruited just last year are now facing layoffs.
The blogger remarked, “In the past, everyone thought that joining a state-owned or government-owned enterprise meant having a secure job, but now layoffs are even harsher than in major corporations. Therefore, in 2025, job seekers need to consider not only the company reputation but also its sustainability.”
A netizen from Guizhou shared in a video, “I am 35 years old, an employee at a state-owned enterprise in Guizhou, serving for 10 years. Recently, the unit stated due to poor performance last year, staff will be laid off, with an offer to receive eight months of wages as compensation…”
Attempts by reporters at Epoch Times to inquire with various bloggers about the enterprises behind the reported layoffs have not received responses.
Official Communist Party sources corroborate the information on layoffs. On September 27, 2024, Xinhua News Agency reported that Wang Hongzhi, Deputy Director of the State-owned Assets Supervision and Administration Commission of the State Council, announced that by 2025, state-owned enterprises must universally implement adjustment measures and incompetence exit mechanisms. By the end of 2024, Gou Ping, Deputy Director of the State Council’s State-owned Assets Supervision and Administration Commission, indicated in a “state-owned enterprise reform” meeting that by the end of 2025, state-owned enterprises would commonly implement management staff adjustments and incompetence exit mechanisms, with the Commission deliberating on formulating relevant guidelines.
According to official sources, “adjustment measures” typically refer to personnel units adjusting job positions or roles based on employee performance, including demotions, job role changes, dismissals, job position adjustments, and on-job training for employees. “Incompetence exit” signifies that even after training or job position changes, if employees still cannot perform adequately, companies will terminate their employment contracts.
In a post on the self-media platform “People’s Worldly News” on January 9, it was mentioned that measures such as layoffs, pay cuts, non-renewal of labor dispatch contracts, and staff reduction have already begun. The once secure “iron rice bowl” within the system appears to have lost its stability.
The post recalled a conversation last winter with an old colleague named Xiao Wang, who mentioned that the unit required all labor dispatch employees to voluntarily submit resignation reports, and those who didn’t would wait for their contracts to expire with no renewal, nor any compensation. Xiao Wang expressed frustration, saying, “I knew this wave of layoffs was coming, but I never thought it would come so soon, and we were all unprepared.”
Reportedly, Xiao Wang’s unit quietly initiated a plan to reduce the number of positions. What used to be ten technical positions within the department were now occupied by fifteen individuals. The leaders also resorted to “tricks,” loaning out five employees to subsidiary companies on a temporary basis. Although the positions appeared unchanged, it was a preparation for future downsizing. Xiao Wang revealed, “The personnel costs in our unit already accounted for 45% of the total expenses last year.”
Regarding the news of layoffs in state-owned and government-owned enterprises in mainland China, American economist David Huang told Epoch Times that the layoffs at state-owned enterprises are a result of economic deterioration, but the issue is not just about the economic decline but rather the so-called “adjustment of power and interests.”
“The economic downturn is indeed a direct inducement. Over the past few decades, state-owned enterprises have relied on government subsidies, industry monopolies, and financial support. However, with the government’s financial constraints and fiercer market competition, the profitability of state-owned enterprises has significantly declined. To maintain financial stability, layoffs become inevitable. But the deeper reason lies in the internal redistributions of power and resources within state-owned enterprises,” he said.
Huang further explained that Chinese state-owned enterprises are more akin to semi-governmental entities, with staffing and resource allocation heavily influenced by political forces. The occurrence of layoffs could potentially be some factions recontrolling the resource distribution of these enterprises, eliminating some old staff to make room for new factions.
It is noteworthy that following the 20th National Congress of the Communist Party in October 2022, a group known as the “Xi family army” took over key positions in various areas within the Communist Party. Under the guise of an anti-corruption campaign, the authorities have initiated extensive personnel purges in various economic interest territories.
Huang also remarked that the layoffs at state-owned enterprises do not necessarily result in efficiency improvements but rather channel resources towards more “core” groups. Ordinary workers lose their jobs while top executives and their associates remain unaffected, leading to situations where some state-owned enterprises lay off employees yet increase executive incomes. Instead of optimizing the structure, this situation ensures they receive a larger share of the shrinking pie. Consequently, state-owned enterprises become smaller yet more enclosed circles of interest, eventually transforming into a purer form of “elite clubs,” where only specific affiliated individuals share the profits.
A blogger named “Central Plain Town” on February 8 shared a video that seems to resonate with Huang’s analysis. He disclosed being employed at a state-owned enterprise for four years and experiencing layoff twice. He felt ruthlessly abandoned. He mentioned that back in December 2023 and March 2024, he was dismissed without reason twice, with layoffs mostly driven by top leadership changes that resulted in non-affiliated staff being laid off.
According to Huang, for ordinary workers, the once-perceived secure “iron rice bowl” at state-owned enterprises has been severely shattered. More young people may now view state-owned enterprises not as long-term job security but rather a place for short-term gains. He believes that the wave of layoffs could continue in the short term, potentially spreading to the civil servant system, leading to a further collapse of middle-class confidence and increased social unrest, making it more challenging for the authorities to control the situation.
“The layoffs at state-owned enterprises, alongside the closures of private enterprises and the withdrawal of foreign investments, are continuous signals indicating the loosening of the economic system’s ‘stability layer.’ Once state-owned enterprises are no longer secure, the sense of security in the whole society collapses, affecting consumption, investment, and even birth rates,” he stated.
Huang pointed out that state-owned enterprises were crucial tools for government stability, providing a substantial number of people with stable employment to avert social unrest. However, with the current wave of layoffs, if these terminated employees form new dissatisfied groups in society, the government’s social governance difficulty will significantly increase. This could potentially lead the authorities to introduce more measures restricting speech and controlling public opinion.