[News] Baidu Reportedly Launches Its Biggest Layoffs in Years as It Overhauls Its AI Business

Tech layoffs are spreading, and China’s tech giant is no exception. According to sources cited by South China Morning Post, Baidu is trimming staff across key divisions and reshaping parts of its AI organization as it seeks to streamline operations after a loss-making quarter. The report adds that this marks Baidu’s largest round of layoffs in recent years.

Sources in the report say Baidu has cut staff in Beijing, Shanghai, and Guangzhou, with layoffs spanning major business units—from its mobile ecosystem group, which oversees the search business, to its intelligent cloud and technology platform divisions.

In addition, sources cited by Benyuan Finance note that some teams saw layoff ratios exceeding 30 per cent. As South China Morning Post reports, a Beijing-based employee in the mobile ecosystems unit said four of the nine members on his team received severance notices and are expected to leave in December.

Layoffs and an AI Shake-Up Inside Baidu

South China Morning Post notes that the layoffs follow a third-quarter loss, even as Baidu’s AI-related revenue jumped 50 per cent in the three months ended September 30. The increase in AI revenue wasn’t enough to offset an otherwise weak quarter, with overall revenue falling 7 per cent year on year due to soft advertising demand and a broader economic slowdown. For the period, the company posted an 11.2 billion yuan (US$1.6 billion) loss, driven by asset write-downs.

Aside from carrying out layoffs, the report, citing Jiemian News, states that Baidu has revamped its AI model development structure by creating two units dedicated to foundational models and application models. These new teams, which report directly to founder and CEO Robin Li Yanhong, will oversee the Ernie AI model series. As the report highlights, leadership of Baidu’s flagship AI model has now been handed to a younger cohort of managers.

Meanwhile, Chinese outlet Kuaima Financial Media notes that Baidu’s AI strategy will require continued and substantial investment. Against the backdrop of a 7 per cent revenue decline, the company’s cost of revenue rose 12 per cent year on year. This increase in fixed costs was driven mainly by infrastructure spending for its AI cloud business and higher content-related expenses. Growth of Baidu’s AI applications, including Ernie Bot, has also been sluggish, with AI application revenue rising only 6 per cent. According to Kuaima Financial Media, its Ernie Bot’s user base remains far below that of ByteDance’s Doubao.

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(Photo credit: Baidu)