Chinese company Baidu (百度) has begun large-scale layoffs, local media reported. Baidu is a major big tech company known as the "Google of China," built on its search business but recently standing out in artificial intelligence (AI). The latest restructuring is the largest in recent years and is seen as the result of aggressively introducing AI into operations to maximize productivity, combined with deteriorating performance in traditional businesses and an AI-focused reorganization.
On the 1st, according to Chinese business outlet Caixin, Baidu has begun cutting staff by as little as 10% by department and up to 30% in some units. The company told Caixin, "This round of layoffs is a routine year-end restructuring with no specific target." But employees said, "The current scale of cuts goes beyond typical year-end adjustments." In particular, layoffs are heavy in traditional units such as search advertising, while reductions are relatively smaller in AI large-model and Autonomous Driving-related divisions.
According to Caixin, the expansion of AI tool adoption is behind the layoffs. Inside Baidu, development efficiency has risen sharply with AI coding tools, and functional organizations have also seen efficiency gains by adopting Generative AI. Baidu is using AI in B2B (business-to-business) customer projects as well. In the past, when developing services for industrial clients, personnel needed both sector-specific knowledge and technical capability, but after adopting AI tools, the barrier posed by industry knowledge has been lowered.
Weak results in traditional businesses and rapid growth in AI also set the stage for restructuring. Baidu's search advertising business, once its core cash generator, has fallen for five straight quarters. The decline deepened this year, with revenue down more than 15% year over year for two consecutive quarters. Third-quarter free cash flow from the search business came in at a loss of 1.855 billion yuan (about 184.9 billion won). By contrast, the cloud business, expected to be a major revenue source in AI, saw third-quarter revenue of 6.5 billion yuan (about 1.3484 trillion won), up 21% from a year earlier.
Baidu has also reorganized its in-house large language model (LLM) "Wenxin (文心)" development team alongside the layoffs. On Nov. 25, it created two new units: a base model research division and an applied model research division. The base model research division will handle development of general-purpose AI large models, while the applied model research division will be responsible for business-specific models. All three units report directly to the chief executive officer (CEO).
With the Chinese government urging restraint in purchasing Nvidia's China-only H20 chip, the resulting windfall for Chinese semiconductor corporations is drawing attention to Kunlunxin (昆仑芯), an AI chip design unit under Baidu Cloud. On Nov. 13, Baidu unveiled a five-year AI chip roadmap. According to the announcement, Baidu plans to release M100 and M300 chips in 2026 and 2027, respectively, and launch next-generation N-series chips in 2029.