Baidu Cuts Jobs as AI Competition and Ad Revenue Slump Intensify

China’s tech giant Baidu has begun a new round of large-scale layoffs affecting multiple business units, according to six sources familiar with the matter. The job cuts come as the company faces mounting pressure from rapid advances in artificial intelligence and a sharp decline in its core online advertising revenue. The downsizing follows Baidu’s third-quarter earnings report on November 18, where the company posted a quarterly loss and its second consecutive revenue drop.

Sources say the layoffs are expected to continue through the end of the year, with some teams seeing reductions as high as 40%, depending on performance ratings and business unit restructuring. While the exact companywide number of job cuts remains unclear, the internal perception is that the scale is significant. Baidu’s workforce has already been shrinking for several years, falling to 35,900 employees at the end of 2024 from more than 41,000 two years prior.

The company’s mobile ecosystem division is expected to see the deepest cuts. However, roles tied to artificial intelligence and cloud computing will largely be safeguarded as Baidu shifts more resources toward strengthening its AI capabilities. Despite being the first major Chinese tech firm to launch a ChatGPT-style service in 2023, Baidu has struggled to maintain its early momentum. Its Ernie large language model now trails behind offerings from Alibaba and fast-rising AI startup DeepSeek, both in performance and adoption.

Baidu’s AI chatbot, Ernie Bot, recorded 10.77 million monthly active users in September—far behind competitors like ByteDance’s Doubao with 150 million users and DeepSeek with over 73 million. While Baidu has integrated AI more deeply into its search products, these efforts have yet to offset falling ad revenue, which dropped 18% in the third quarter. The company’s overall revenue slipped 7%, and it reported a loss of 11.23 billion yuan ($1.59 billion).

As global tech giants including Amazon and IBM also undergo major restructurings, Baidu’s job cuts reflect broader challenges facing the technology sector amid shifting market conditions and intensifying AI battles.