Recent reports have surfaced regarding significant workforce reductions and benefit cuts at China Telecom's cloud computing subsidiary, Tianyi Cloud. Former employees claim the company has seen roughly 30% of its staff depart, including fresh graduates, with reports of cancelled benefits and salary reductions of 10,000 yuan. However, current employees suggest the online rumors may be somewhat exaggerated, though they confirm that layoffs and reduced welfare packages have indeed occurred.
According to financial reports, China Telecom's parent company workforce peaked in 2022 and has declined annually since then. While research and product development roles have seen increases, other positions have experienced varying degrees of reduction. The company's financial performance has also come under pressure, with both revenue and profit declining in the first half of 2026.
Tianyi Cloud was established in 2012 as China Telecom's foray into the cloud market, aiming to create a second growth curve amid sluggish traditional telecom services. The brand was formally restructured into a technology company in 2021, focusing on full-stack cloud computing services. The recent layoff rumors have prompted mixed reactions from employees, with some describing the situation as "exaggerated" while others confirm significant staff reductions.
One current employee noted that while layoffs are happening, social media descriptions may overstate the severity. "Besides those who were let go, some left voluntarily," she said, estimating that combined departures across regions total around 30%. However, not all regions have been equally affected, with some employees in Sichuan reporting no layoffs but noting salary adjustments and hiring freezes.
Employees describe Tianyi Cloud as a "state-owned enterprise branded internet giant," characterized by fast-paced work, frequent overtime, and strict performance evaluations. Some departments reportedly maintain a "last-place elimination" system. The company's market-oriented approach means performance and efficiency drive decisions, with generous compensation during good times and cutbacks during challenging periods.
Regarding fresh graduates, employees indicate limited protection exists. Many new graduates have reportedly been persuaded to leave this year, often with compensation but without clear reasons. The performance review system is demanding, requiring two years of service without poor ratings before promotion opportunities arise. Contracts for graduates not on "talent" tracks typically aren't renewed after three years.
While rumors of across-the-board 10,000 yuan salary cuts appear exaggerated, employees confirm reduced benefits compared to previous years. Annual bonuses that existed two to three years ago have been eliminated, and subsidies like high-temperature allowances have been reduced. As one employee summarized, benefits have been "salary-ized" and salaries "performance-ized."
The contraction at Tianyi Cloud follows a trajectory of missed growth targets. In 2023, China Telecom's chairman set a "100 billion yuan" revenue goal for Tianyi Cloud three times, ultimately achieving 97.23 billion yuan. Growth rates that once exceeded 100% annually slowed dramatically to 17.1% in 2024, 5.97% in 2025, and just 7.8% in the first half of 2026, making workforce adjustments seem inevitable given its market-oriented positioning.
The parent company China Telecom faces similar challenges. Workforce data shows employee numbers peaked at 272,000 in 2022 before declining to 265,000 by 2025, a reduction of nearly 8,000 over three years. While total workforce including subsidiaries has remained relatively stable, significant shifts have occurred in job composition, with research and product development adding nearly 4,000 positions while sales, operations, and maintenance roles saw corresponding reductions.
Beyond personnel adjustments, China Telecom has been quietly reducing benefits. One municipal company employee described how "red-headed document" benefits haven't officially changed, but actual welfare has diminished—comparing it to receiving "JD Beans" instead of "JD Cards" with equivalent face value but less purchasing power.
Leadership changes have also been frequent, with the group general manager position changing hands three times in just over two years. Industry analysts suggest these adjustments reflect necessary responses to changing market conditions. The previous model of aggressive hiring and expansion during the digital economy boom has become unsustainable as non-core business areas struggle to generate positive cash flow.
The broader telecom industry faces similar pressures. All three major operators recently announced restrictions on number card processing and third-party online sales. Industry-wide profit declines are evident, with China Telecom's net profit dropping 14.9% year-over-year in the first half of 2026. Analysts believe operators must shift strategy from expansion to value creation, focusing on deepening existing customer relationships and converting network advantages into digital service products.