LinkedIn which is undoubtedly the world’s largest social media platform for professionals and job seekers is set to cut 716 jobs in addition to phasing out its app in mainland China. In a letter today, the California based company’s CEO Ryan Roslanky said the decision to close the standalone China app, called InCareer, was due to “fierce competition and a challenging macroeconomic climate.”
Recently, there has been a shift in customer behavior and the company has also been faced with slower revenue growth.
“As we guide LinkedIn through this rapidly changing landscape, we are making changes to our Global Business Organization and our China strategy that will result in a reduction of roles for 716 employees,” he said.
LinkedIn, which is a Microsoft (MSFT) owned company, has joined a number of US tech companies that have made significant job cuts in recent times this year. LinkedIn, which has 20,000 employees plans to create about 250 new jobs in some segments of its operations, as well as new business and accounting management teams, on May 15.
LinkedIn’s InCareer app for mainland China will be phased out by August 9. However, according to a company spokesperson, LinkedIn still intends to retain some presence in China, which will include providing services for companies operating in the country to hire and train employees outside the country.
LinkedIn is the last major Western social media app that is still available in China. For more than a decade, Twitter, Facebook, and YouTube have been prohibited in the country. Google announced its departure in early 2010.
LinkedIn China Challenges
LinkedIn first entered China in 2014, when it launched a localized version of its main app. However, its moves to censor posts in the country in accordance with Chinese laws drew criticism.
LinkedIn had to suspend sign-ups in China in March 2021 in order to be “in compliance with local law.” A few months later that app was replaced with InCareer, which focused solely on job postings but lacked social networking features such as sharing and commenting.
InCareer was designed to help Chinese professionals network, find, and apply for jobs, but it faced competition from Maimai, the country’s dominant professional networking site with over 120 million users, according to its website. The ability to share posts anonymously is one of Maimai’s benefits, making it a popular destination for employees looking to vent or learn more about their companies.
By 2021, it would have more than 50 million members in the country, making it the company’s third largest market after the United States and India. However, it was still lagging behind local competitors such as Maimai.
Maimai, the Chinese version of LinkedIn, was launched in 2013. With 110 million verified members, it quickly surpassed LinkedIn as the most popular professional networking platform in the country. Its ability to allow users to post anonymously in a chat forum was a key feature that contributed to its success.
China’s operating environment has also become more difficult. Since taking power in 2012, Xi Jinping has tightened control over what can be said online and launched a series of internet crackdowns.
“While we’ve found success in helping Chinese members find jobs and economic opportunity, we have not found that same level of success in the more social aspects of sharing and staying informed,” LinkedIn wrote in an October 2021 blog post. “We’re also facing a significantly more challenging operating environment and greater compliance requirements in China.”
LinkedIn Laid-off employees who are covered by U.S. benefits
Employees laid off in the United States will receive severance pay, continuing health coverage, and career transition services, while employees outside the United States will receive benefits in accordance with local labor laws and practices.
The layoffs and InCareer’s phasing out are part of changes that LinkedIn is making to its Global Business Organization (GBO) and China strategy. As part of that, LinkedIn is sunsetting its Business Productivity team. It also plans to reduce management roles and use more vendors to “serve emerging and growth markets more effectively.”
Roslansky said he expects fiscal year 2024 to “remain challenging. “We’re adapting as we have done this year and will continue to operate with the ambition we need to deliver on our vision and the pragmatism required to run the business well,” he wrote.