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Baidu, commonly known as the “Chinese equivalent of Google,” has begun extensive reorganization before the end of the year, leading to insights that AI-based changes in the workforce are becoming more rapid within China’s information technology industry.

As reported by Reuters, Chinese economic media Caixin, and other outlets on the 1st, Baidu has recently initiated substantial job cuts across various business units. Although the precise number is not yet revealed, several sources suggest that reductions vary between 10–30% based on department and individual performance assessments, with certain teams experiencing up to 40% decreases.

Baidu is said to have provided a unique compensation plan for employees who are leaving, featuring benefits tied to their length of service and extra severance pay that covers at least three months’ worth of salary.

The main focus of the restructuring was on conventional departments like search and advertising, whereas AI service development and self-driving teams experienced comparatively smaller cuts.

The reduction in staff is linked to the implementation of AI technologies. Baidu utilized AI-based code generation tools within its development teams to speed up processes and integrated generative AI tools in non-technical departments to boost productivity. Consequently, projects that once needed a large workforce now require fewer personnel.

A reduction in income from its main search advertising segment also contributed to the company’s restructuring. Search ad earnings have decreased for five straight quarters, with the pace of decline speeding up recently. Conversely, the AI cloud division saw a 33% increase in revenue compared to the same period last year during the third quarter.

Additionally, Baidu is reorganizing its structure to prioritize AI-focused divisions. It recently restructured the team responsible for its large language model (LLM) “Wenxin” (文心) and established new departments for foundational and applied models. All three divisions now report directly to the CEO.

This action indicates that leading Chinese IT companies are moving into a period of restructuring older systems during the shift towards AI. As generative AI transitions from a technological advancement into a factor influencing real workplace transformations, industry analysts are watching to see if this reorganization trend will extend to other businesses.