Chinese search giant Baidu is reportedly entering a restructuring mode, cutting deep across its workforce after initiating one of its largest layoff rounds in years in the wake of its third-quarter 2025 downturn. The cuts began in late November 2025 and are hitting Baidu’s long-standing mobile ecosystem group the hardest, with some teams facing reductions of up to 40%, reports Reuters. Employees across major hubs (including Beijing, Shanghai, and Guangzhou) have been notified, with severance packages generally based on one month of pay per year of service and additional compensation tied to seniority.
The company, which ended 2024 with about 35,900 employees (down from 39,800 in 2023 and 41,300 in 2022), is now preparing for an even sharper drop in headcount as it pushes forward with its restructuring effort. The ongoing contraction reflects Baidu’s multi-year trend of trimming legacy operations, as its traditional search and mobile services continue to lose ground to newer digital platforms, short-video apps, and algorithmic recommendation ecosystems that have reshaped China’s online advertising landscape.
The layoffs come on the heels of a rough third quarter for Baidu. For the three months ending September 30, the company pulled in ¥31.17 billion in revenue, down about 7% year over year – one of its weakest quarters in years. The downturn was driven primarily by a drop in online advertising, which has historically been the company’s core cash engine. While China’s advertising market struggled to bounce back through 2025, Baidu felt it more sharply than rivals that had already branched out into e-commerce and short-video platforms. As revenue fell, profitability collapsed. The company posted a ¥11.23 billion net loss for Q3, a sharp turnaround from a ¥7.63 billion profit in the same period last year. Adjusted net income also fell to ¥3.77 billion, while adjusted EBITDA dropped from ¥8.73 billion to ¥4.43 billion, slashing the margin almost in half.
But at the same time, one bright spot in the quarter was Baidu’s AI business. Revenue from AI jumped 50% year-over-year, hitting around ¥10 billion, fueled by enterprise cloud offerings, AI marketing tools, and services built on its large-model infrastructure. Despite this strong growth, AI was not enough to make up for the sharp decline in ad revenue. Clearly, the clash between falling legacy revenue and booming AI growth seems to be driving Baidu’s restructuring strategy. The company is trimming older units tied to mobile services, content distribution, and traditional search ads, while keeping AI and cloud teams largely intact – and in some cases, even growing them.
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