Chinese companies are increasingly turning to artificial intelligence to improve productivity, but some workers say the shift is also leading to quiet job cuts across technology, entertainment, advertising, and other white-collar industries.
Chinese firms are “quietly implementing small-scale layoffs” as they seek AI-linked productivity gains without drawing government scrutiny.
The trend reflects a delicate challenge for Beijing. The government wants companies to adopt AI quickly enough to transform productivity, but not so visibly that large numbers of displaced workers create social instability.
OpenClaw and the fear of replacement
According to Reuters, one worker identified only as Liu, a 26-year-old contractor based in Hangzhou, shared that her employer began quietly firing contractors in March after requiring staff to use AI tools, including the AI agent OpenClaw.
Liu said the tasks most people perform could be “completely replaced by OpenClaw” once workers write their workflows into the tool. She added that after that process, employees could “basically be fired.”
The company also began reducing graduate hiring, as Chinese firms move quickly to implement AI systems.
Firms avoid mass layoffs due to legal and political risks
Chinese employers are not announcing mass layoffs in the same way some global companies have done. One reason is legal. Chinese labor laws require companies to seek government approval for job cuts exceeding 10% of their workforce.
Business Times reported that Chinese courts have ruled in at least three cases against companies that dismissed workers to replace them with AI.
A senior manager at a major Chinese fintech company shared that private firms may need to accept some inefficiency to avoid layoffs that could trigger “social instability” or political consequences.
An engineer in Alibaba’s cloud division also shared that AI-driven headcount reductions had started in parts of the company, but were likely to happen through gradual cuts and attrition rather than a single large layoff round.
AI use becomes a performance target
The shift is not limited to replacing tasks. Some companies are also measuring whether employees are adopting AI quickly enough.
Some workplaces are tracking employee use of tokens, a unit of AI compute consumption, to estimate efficiency, though token use does not necessarily prove productivity or work quality.
A big data engineer at a Chinese technology company said his manager began ranking employees by token usage in March and that the metric would be linked to performance reviews and promotion prospects.
He shared that the practice felt “relatively forced” and said he could not shake the feeling that he was getting closer to being replaced.
Entertainment workers face sharp disruption
The entertainment sector is also feeling pressure as low-budget micro drama studios turn to AI-generated actors and sets.
Reuters shared that Ayase, a 22-year-old micro drama producer who was fired in February, said that her production department previously had 30 to 40 people, but after the AI transition, each group was cut to around 10 people, with only two remaining for live-action filming.
She said even a minor live-action role with only a few lines could cost thousands of yuan per day, making AI-generated production attractive to cost-conscious studios.
Youth workers face a difficult transition
Beijing’s “AI Plus” initiative targets 70% AI adoption across key sectors by 2027 and 90% by 2030.
However, analysts warn that AI-driven job creation is not keeping pace with displacement. AI-related job postings surged 74% in 2025, but this comes as a record 12.7 million university graduates face declining entry-level pay and fewer jobs.
Citibank estimated that 9.6% of all Chinese jobs, or roughly 70 million positions, are at high risk of AI-driven displacement. For workers in their 20s, the risk rises to 13.6%.
Selena Guo, a social policy analyst at China Policy, shared that AI sits at the center of China’s economic transition because it is both a driver of disruption and the proposed solution to it.
Public anxiety is already visible online. The hashtag “AI anxiety” gained more than 7.8 million views on RedNote, where users debate whether AI will make them obsolete.
For Beijing, the challenge is no longer whether companies will adopt AI. It is whether the country can manage the human cost of automation without turning quiet layoffs into a louder employment crisis.
