Chinese internet giant ByteDance has told employees in India that it is reducing the size of its team in the country after New Delhi retained ban on TikTok and other Chinese apps last week, said a source familiar with the matter and an internal memo obtained by TechCrunch. After the publication of this story, a TikTok spokesperson confirmed the layoff.
The company, which employs more than 2,000 people in India, shared the news with employees in the country at 10 am local time and said only critical jobs will be retained in the country, said the source. More than two-thirds of the company's workforce is expected to be eliminated, the source said. ByteDance said it was left with no choice after the Indian government, which banned its marquee app late June last year, had offered no clear direction on when TikTok could make return in the nation, the source said on the condition of anonymity.
"It is deeply regretful that after supporting our 2000+ employees in India for more than half a year, we have no choice but to scale back the size of our workforce. We look forward to receiving the opportunity to relaunch TikTok and support the hundreds of millions of users, artists, story-tellers, educators and performers in India," a TikTok spokesperson told TechCrunch.
Prior to the ban, India was the biggest international market for TikTok, which had amassed over 200 million monthly active users in the world's second largest internet market. India blocked over 200 apps with links to China last year amid geopolitical tension between the two nations. New Delhi has said that these apps engaged in activities that posed threats to “national security and defence of India, which ultimately impinges upon the sovereignty and integrity of India."
Last week, New Delhi told ByteDance and dozens of other Chinese firms that it maintains the concerns it had originally charged against them and would retain the ban.
TikTok CEO Vanessa Pappas and VP of Global Business Blake Chandlee shared more context about the move in a memo to India employees today. "We initially hoped that this situation would be short-lived, and that we would be able to resolve this quickly. Seven months later, we find that has not been the case. Many of you have patiently waited to hear how this would play out, which has been very stressful. Thank you for your continued belief and trust in us," they wrote.
"As you can imagine, a decision of this magnitude is not easy. For the last several months, our management team has worked tirelessly to avoid having to separate anyone from the company. We've cut expenses, while still paying benefits. However, we simply cannot responsibly stay fully staffed while our apps remain un-operational. We are fully aware of the impact that this decision has for all of our employees in India, and we empathize with our team."
Today's move caps some of the strangest and confusing months for ByteDance employees in India. Following the ban, the employees were told to focus on developing a range of other apps from the Chinese giant such as the productivity suite Lark that had not been blocked in India.
But they were asked to not talk about these apps in the public to avoid putting risk of other ByteDance properties also getting the limelight. The source said ByteDance also stopped all marketing efforts in India to promote its other services in the country.
"While we don't know when we will make a comeback in India, we are confident in our resilience, and desire to do so in times to come," Pappas and Chandlee wrote in the memo.
In a statement on Wednesday, Ji Rong, spokesperson of Chinese Embassy in India, said the nation's ban on Chinese apps violates guidelines by the World Trade Organization. "These moves in violation of WTO non-discriminatory principles and fair competition principles of market economy severely damage the legitimate rights and interests of Chinese companies. The Chinese side firmly opposes them."
"The Chinese government always asks Chinese companies to observe international rules and local laws and regulations when doing business overseas. The Indian government has the responsibility to follow WTO rules and market principles and protect the legitimate rights and interests of international investors including Chinese companies. These moves of the Indian government have also hindered the improvement of the Indian business environment and the innovative development of related Indian industries. China-India economic and trade cooperation is mutually beneficial by nature. We urge the Indian side to immediately correct its discriminatory measures and avoid causing further damage to bilateral cooperation."