Huawei’s outsourcing partner, Xi’an “Zhongruan International,” had a collective labor dispute erupt among its employees. On May 11th, hundreds of Zhongruan International employees gathered in the office area, protesting the company’s attempts to force employees to resign voluntarily through salary cuts and job transfers to avoid compensation responsibility. Employees at the scene continued to live stream the labor rights process and publicly questioned the company’s management.
The on-site video showed hundreds of employees confronting management personnel. Some employees were emotional, demanding clear compensation plans from the company. A female employee named Liu said at the scene, “Our demands are simple. Before the labor relationship ends, we will continue to look for jobs, continue to interview, and maintain our original positions and salaries throughout this process. What’s wrong with that?”
Another protester said, “If you can’t do it, then compensate pregnant employees according to the standard compensation for normal dismissals, and we will leave. You don’t want to compensate, but you want to cut salaries and force us out. Is this reasonable?”
Other employees at the scene questioned the company’s staff, asking, “Can you solve any problems? If you can’t solve the problems, stop talking about feedback all the time. We have given feedback many times before, and every time it’s ‘feedback, feedback,’ but no one proactively contacted us. Today, I called the person in charge, but they didn’t answer, and even if they were upstairs, they didn’t come down. Is this your communication attitude?”
Mr. Liu, a labor rights activist in Xi’an, told reporters that many local companies have been laying off employees under the guise of “optimization” and outsourcing some processes: “By doing this, they can save on social security contributions and benefits for employees. Many workers come from impoverished mountainous areas such as Luliang Mountain and Liupan Mountain because they see no future there. The authorities turn a blind eye to these exploitative enterprises, and I believe that among those who rise up to resist in the future, they will be among them.”
Zhongruan International employees disclosed that the company has not officially announced layoffs recently but has been pressuring employees to resign voluntarily through job adjustments, salary reductions, and increased evaluations, including some pregnant employees.
Founded in 2000, Zhongruan International is headquartered in Beijing and is one of China’s large software and technology outsourcing enterprises and a significant outsourcing supplier for Huawei. The company has long been involved in projects in the communication, finance, and government sectors and is listed on the Hong Kong stock exchange.
In recent years, the Chinese technology industry has seen a continuous trend of layoffs, salary cuts, and project downsizing. With the economy slowing down, orders for many outsourcing companies have decreased, leading many companies to start reducing costs through “disguised layoffs.”
Huang Ping (pseudonym), a software engineer in the technology industry, told reporters that the Chinese internet and software industry is entering a phase of continuous elimination, with many companies unwilling to bear the costs of formal layoffs: “They come up with various pretexts such as factory relocation, job transfers, performance pressure, salary reductions, etc., making it difficult for employees to continue and forcing them to resign. This phenomenon has recently spread from Guangdong and Jiangsu to the inland areas.”
She stated that the profit margins of outsourcing companies are shrinking, and after upstream companies reduce their budgets, downstream companies receive fewer orders. Companies lay off employees without wanting to provide reasonable compensation, eventually leading to worker strikes and protests.
After the incident was exposed, many netizens criticized Zhongruan International on social media for prioritizing profits over worker’s legal rights. Some comments mentioned, “Many companies are now afraid to formally lay off employees and resort to playing dirty tricks.” Others said, “Labor laws are becoming more like decorations.”
Mr. Liu, the labor rights activist, said that the Chinese Communist Party has long allowed large enterprises to evade labor responsibilities through “optimization” and job transfers, while local governments are more focused on stability and investment attraction.
He stated, “The local government in Xi’an is actually on the side of capital. As long as companies can still pay taxes and maintain employment figures, the authorities often turn a blind eye when workers are being underpaid, forced to resign, and ignore workers calling the municipal government hotline. I heard that workers in Xianyang blocked roads in protest.”
In recent years, continuous reports of technology companies in China laying off employees, withholding wages, and suspending projects have emerged in many areas. As companies cut expenses and orders decrease, the situation in the Chinese internet and software industry of large-scale layoffs without consideration for workers’ rights continues.