In Depth: Outsourced Staff at China’s Tech Giants Face ‘Soft Dismissal’
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As China’s tech giants aggressively cut costs, they are increasingly turning to outsourced workers who face precarious employment conditions and a form of “soft dismissal” that leaves them in a state of limbo.
In April, Li Qing, an outsourced worker at Alibaba Group Holding Ltd., was told her team was being downsized and she had to leave her project. She was sent back to her outsourcing agency for “standby duty,” a practice known among contract staff as “benching.” Theoretically, she could be reassigned to a new project. In reality, multiple affected workers told Caixin they are left with no tasks while receiving only a minimal base salary, pressuring them to resign.
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- Chinese tech giants are increasingly replacing full-time employees with outsourced workers, with Alibaba reducing its workforce by over half to 123,711 by June 2025.
- Outsourced workers face "soft dismissal," where they receive minimal pay and no tasks, pressuring them to resign without severance; such practices are considered illegal under Chinese labor law.
- Despite precarious conditions and unequal treatment, many still prefer outsourced positions at top tech firms as a crucial entry point into the industry.
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- Alibaba Group Holding Ltd.
- Alibaba Group Holding Ltd. has significantly reduced its full-time workforce, cutting over half of its employees from a 2022 peak to 123,711 by June 30, 2025. This cost-cutting measure has led to an increased reliance on outsourced workers. However, these outsourced staff often face precarious employment conditions, including "benching" or "soft dismissals," where they are removed from projects, given minimal pay, and pressured to resign.
- NetEase Inc.
- NetEase Inc. has experienced a steady decline in its employee numbers since 2021. The article mentions NetEase as one of China's tech giants that have been actively cutting costs and reducing their permanent workforce, alongside Alibaba and Baidu. This trend is part of a broader industry slowdown and a shift towards increased reliance on outsourced workers.
- Baidu Inc.
- Baidu Inc. is navigating an industry slowdown by reducing its permanent staff since 2021. Alongside this, the company, like other Chinese tech giants, is increasingly relying on outsourced workers. This trend is part of a broader cost-cutting strategy, leading to a "soft dismissal" practice where outsourced staff are benched with minimal pay, pressuring them to resign.
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