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China's IT sector saw massive layoffs in 2018: state media

Press Trust of India  |  Beijing 

China's thriving IT sector has experienced "massive layoffs" in 2018 which turned out to be a "chaotic year" for the industry, an here said on Wednesday, highlighting effects of the slowdown on the world's second largest

"In June, hundreds of lenders fell like dominoes. Two months later, the revenue of fell 5.9 per cent year-on-year, reporting a USD 127 million net loss," a write-up in the state-run said.

The company had been laying off people since the end of 2017.

In the fall, and also reduced new hires, it said.

Dwelling on how a once thriving has started feeling the chill this year, it said from a macroeconomic perspective, is facing a tightening environment for its currency and stricter financial regulations.

In addition to the simmering trade war with the US, capital became prudent. As IT companies are finding it harder to secure financing, they should save their strength and prepare for future challenges, the write up said highlighting various measures by the industry and the government to revive the sector.

is locked in a trade war with the US over Donald Trump's demand to cut the USD 375 billion trade deficit. With continued economic slowdown, is under increasing pressure from Trump for reciprocal trade arrangements which could hit its further.

The Chinese grew at 6.5 per cent in the third quarter posting its slowest growth since 2009 as it grappled with the intensifying trade war with the US and mounting local government debt which rose to USD 2.58 trillion.

In his New Year address, said despite the slowdown the Chinese economy stayed within a reasonable range in 2018.

Adding to the worries, China's stock market became the world's worst performer last year, ending with a loss of 28 per cent.

American companies like Apple and have already attributed lowered revenue estimates to the trade war with China. Other large US firms like Caterpillar, and also view China's market as critical to their future growth.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, January 09 2019. 14:00 IST