Gaming giant NetEase is under fire on Chinese social media for its layoff practices following a series of WeChat articles from a former employee who alleges that he was fired without cause while contending with a serious illness.

Why it matters: NetEase has reportedly been laying off large numbers of employees from its gaming, e-commerce, and education businesses since February, though the company has said on a number of occasions that the numbers mentioned in the reports are inaccurate.

  • According to a report from Caijing Magazine, NetEase fired 30-40% of its staff in February from its e-commerce platform Yanxuan, 100 employees for its education unit, and 40% of its public relations staff.
  • Many former NetEase employees have said on professional networking platform Maimai that the layoff numbers are real.

Details: The former NetEase employee said in a WeChat article which has been viewed more than 100,000 times that he was fired in March despite being one of the top-performing employees on his team.

  • The employee joined NetEase in 2014 and worked as a game designer for five years.
  • According to the article, the employee was diagnosed in January with dilated cardiomyopathy, a potentially serious heart condition.
  • He was told by his manager to leave the company in March after receiving a “D” rating in his employee evaluation. However, the employee said he had the second-highest output in his team during the period, showing several screenshots as proof in articles published to his WeChat public account.
  • The former employee also said that NetEase human resource personnel threatened retribution when he asked for a standard six-month salary compensation for his five years at the company, signaling that he would be given a bad reference if he pushed for the severance.
  • The employee did not immediately respond to TechNode’s inquiries on Monday.
  • NetEase issued a statement on Monday, apologizing for the company’s “insensitive” and “harsh” practices but stating that the former employee did not meet quality standards in his work despite his high output.
  • The company said that it gave the employee a six-month salary compensation and promised to offer more help as needed. The former employee confirmed that the company paid the severance following a labor law arbitration in a post on his public WeChat account.
  • Chinese netizens blasted NetEase on Chinese social media, and the story ranked second on microblogging platform Weibo’s trending topics as of Monday afternoon. Many Weibo users criticized NetEase’s apology as “insincere” and “a mere cover-up.”
  • “You gave the most work to the lowest-performing people on the team because he produces the most bugs? Am I stupid, or are you?” asked Weibo user suing the handle “Shuiyin Qianchang” in a comment on a post about NetEase’s apology.
  • WeChat users also slammed NetEase for the statement. “NetEase did not apologize for what it did. It apologized for the public getting to know what it did,” a user said in a comment about a news story on the incident from Tencent News. The comment received more than 1,100 upvotes.

Context: NetEase has been trying to reposition itself in China’s internet landscape, selling its cross-border e-commerce platform Kaola to Alibaba in September.

  • The company secured $700 million from Alibaba and Yunfeng Capital for its NetEase Cloud Music in September.
  • The company’s education unit Youdao listed on the New York Stock Exchange on Oct. 25, offering 5.6 million American depositary shares (ADS) for a net raise of $213 million.
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Tony Xu

Tony Xu is Shanghai-based tech reporter. Connect with him via e-mail:

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