Xpeng Motors and Li Auto recently rescinded some job offers given to fresh college graduates as a recent Covid-19 outbreak and strict lockdown controls put stress on Chinese businesses, local media reported on Thursday.

Why it matters: The cutbacks indicate that Chinese electric vehicle (EV) companies are adopting more conservative and selective hiring practices as they navigate a time of economic uncertainty. EV makers are also facing rising battery material costs and semiconductor shortages, putting pressure on their earnings.

Details: A college graduate surnamed Wang, who had received a written offer from Xpeng last year and was supposed to begin work this summer, has had his job offer rescinded, according to a Thursday report by Chinese video outlet Houlang.

  • A human resources staff member told Wang on May 9 that the company had to rescind the offer because of “business adjustment,” offering him RMB 5,000 ($748) in compensation instead, Wang recalled, adding that over 20 fresh graduates he knows are in a similar situation.
  • In a statement sent to local media outlet Sina Tech on Friday, the EV maker said that it withdrew some job offers for fresh graduates and let go of some employees as part of a realignment of some “marginal” functions (our translation).
  • The company added that it has recruited over 10,000 new employees amid strong growth since early 2021. It added that around 900 fresh graduates are scheduled to be on board this July but that it will take measures to reflect business priorities and increase operational efficiency.
  • Xpeng’s news came days after rival Li Auto reportedly (in Chinese) rescinded around 100 graduate job offers. The company did offer transfers for job openings to some technical graduates that had offers in the autonomous driving and data analytics departments.
  • On May 11, Li Auto confirmed that some of its positions were eliminated because the company is realigning certain functions and teams without revealing any further information. The EV maker is scaling down some recruitment plans due to delayed product launches and changed business outlook for the year, state-owned media outlet Yicai reported on May 12, citing a company insider.

Context: A broader hiring slowdown is on the way across sectors in China, as the country prioritizes strict pandemic control. 

  • ByteDance on Thursday denied reports that it was cutting 80% of its workers in its game distribution department but confirmed that the company trimmed headcounts, following several rounds of layoffs last year amid Beijing’s regulatory crackdowns on tech firms.
  • Social e-commerce site Xiaohongshu cut about 200 employees, mainly affecting fresh graduates and recent hires. Home appliance maker Midea on Thursday confirmed plans to reduce its workforce and halt non-essential investment given the current macroeconomic environment, Chinese media Yicai reported.

Correction: Xiaohongshu’s layoff number has been updated from an earlier version of this article.

Jill Shen is Shanghai-based technology reporter. She covers Chinese mobility, autonomous vehicles, and electric cars. Connect with her via e-mail: jill.shen@technode.com or Twitter: @yushan_shen