AI layoffs are already a reality in the US, but China is moving at a different pace
Layoffs driven by artificial intelligence are already reshaping the job market in the US in ways few expected to happen this fast.
While Silicon Valley giants slash jobs en masse and engineers wake up without a job — and sometimes without a visa — on the other side of the Pacific, China seems to be, at least for now, operating at a different pace.
But why are two of the largest tech markets in the world reacting so differently to the same wave of automation?
The answer involves salaries, corporate culture, government policy, and a structural gap that goes way beyond which country has the most advanced AI.
Spoiler: it’s not just about technology. 😄
The current layoff landscape in the US
Oracle became the latest US tech giant to undergo massive layoffs, redirecting its investments toward artificial intelligence. And it’s far from an isolated case. Over the past few months, the American tech sector has been cutting jobs at a rapid clip, with companies justifying the moves by adopting automated tools that replace tasks once handled by entire teams.
Customer service, data analysis, content production, code review — all of it is being absorbed by AI systems at a speed the job market simply wasn’t ready to keep up with.
The problem in the US isn’t just how fast automation is moving, but also the business model big tech companies adopted. During the pandemic, these companies hired at breakneck speed, betting on growth that didn’t hold up. When the bill came due, the quickest fix was cutting headcount — and AI stepped in as both a convenient justification and, at the same time, an actual replacement for a big chunk of those roles.
The result is that today a software engineer in the United States is competing not just with other engineers from around the world, but also with language models that write, review, and debug code with impressive efficiency.
The struggle of foreign workers in Silicon Valley
There’s one factor that makes things significantly worse for foreign workers employed at American companies: the visa. Many Chinese professionals who came to work in Silicon Valley are being laid off and losing the right to stay in the US within a matter of weeks.
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According to an HR manager at a Silicon Valley startup who previously worked at Baidu and TikTok, many engineers are choosing to return to China because landing another American job in time to maintain their residency requirements is incredibly difficult.
She pointed out that both markets are competing for the same pool of skilled professionals. The combination of accelerated automation with a rigid immigration regulatory environment has created a particularly tough scenario for these workers. What would already be a difficult layoff turns into a full-blown life crisis.
And the transition back to China isn’t always smooth either. For those who spent years at American companies, the Chinese work pace — with long hours and a hyper-competitive environment — can be a considerable culture shock.
Why China is moving at a different pace
Looking at China, layoffs driven by artificial intelligence do exist, but they’re still happening at a very different scale and speed. And there are concrete reasons for that.
Much lower labor costs
The first reason is cost. The job platform Zhilian revealed last month that the average monthly salary for in-demand algorithm engineers in China was 20,035 yuan — roughly $2,900. While that’s considered a solid starting salary in the Chinese market, on an annual basis, we’re talking about approximately $35,000.
Compare that to Silicon Valley: a level-2 software engineer in the US earns around $300,000 in base salary. That’s nearly ten times more, even considering that American taxes and cost of living are significantly higher.
According to Alex Lu, founder of LSY Consulting, precisely because of this lower labor cost, Chinese companies aren’t laying off nearly as many people as their American counterparts. Automation will hit harder eventually — and it’s already arriving — but the financial trigger is less immediate. When keeping an employee costs a fraction of what it costs in the US, the urgency to replace them with a machine drops considerably.
The role of the Chinese government
There’s also a very significant political difference. Unlike the US, Beijing has a national employment target — keeping the urban unemployment rate around 5.5%. That kind of state-level directive completely changes the dynamic. Chinese companies know that aggressive workforce cuts can attract unwanted regulatory attention and run counter to government objectives.
Chinese central bank adviser Huang Yiping recently said that China needs to pursue high-tech development to achieve economic growth — but emphasized that any AI innovation must put human needs first. This official stance creates an environment where technology is encouraged, but not at the expense of destabilizing the job market.
That doesn’t mean layoffs aren’t happening. Alibaba, for example, reported a drop of over 30% in its headcount, attributed to business shifts aimed at prioritizing artificial intelligence efforts. But other giants are on a different path: Tencent reported a modest increase in total employees over the past year, and Huawei said it had 114,000 R&D employees in December, up from 113,000 a year earlier.
Corporate structure and work culture
Another relevant factor is the difference in how companies are structured. While remote work became widespread in the US after the pandemic, companies in China tended to maintain in-office requirements as much as possible. There’s also a cultural element, where many business leaders value direct oversight of large in-person teams.
According to Tina Zhou, founder of the marketing startup Boomfluence.ai, which is based in Beijing with quarterly trips to San Francisco, an engineer at a Chinese company typically handles a broader range of tasks than one at an equivalent American big tech firm. That makes the role harder to fully replace with AI.
Zhou added that many Chinese companies also have more employees working in marketing and client operations — not just engineering. This diversity of roles creates an additional layer of protection against full automation.
Alex Lu from LSY Consulting also noted that companies in China are less digitized compared to those in the US, where enterprise software adoption is more widespread. This limits the immediate impact of AI. For example, despite the recent popularity of OpenClaw in China, it’s a product geared toward individual productivity, not an enterprise-level solution.
AI as a growth engine vs. AI as a cost-cutting tool
This is perhaps the most important difference between the two countries right now. In the US, artificial intelligence is being used primarily as a tool for reducing operational costs. Companies adopt AI to do the same work with fewer people — and the stock market rewards that with immediate valuation bumps. It’s a short-term logic that works great for shareholders and terribly for workers. The layoffs aren’t a side effect of technological progress — they are the goal in many cases.
In China, the official narrative — and largely the actual practice — is different. AI is being positioned as a growth engine, a way for companies to reach new markets, launch new products, and increase revenue. China is investing heavily in training programs to turn the challenge of mass automation into an opportunity for economic renewal.
When technology is used to grow, it doesn’t have to come with mass layoffs. Of course there are exceptions and the picture isn’t perfect, but the overall direction creates an environment where employment and automation coexist with less friction.
It’s worth noting that this difference in approach also reflects distinct stages of technological and economic maturity. The US has much more mature tech companies with high cost structures and relentless Wall Street pressure for efficiency. China still has companies in an aggressive expansion phase, where growing fast matters more than optimizing to the max. That completely changes how artificial intelligence is used — and who ends up footing the bill for that choice.
Education is already eyeing the future
Even with the Chinese job market being more protected in the short term, AI remains a hot topic among parents in China, who have historically been very anxious about their children’s education and professional success.
Education influencer Zhang Xuefeng, widely followed across the country and who passed away last month, said in a video posted in December that kids starting from sixth grade should already begin learning about artificial intelligence and pay attention to related opportunities in engineering, robotics, and chips.
That concern makes sense when you look at the numbers: an estimated record 12.7 million Chinese college graduates will enter the job market in 2026. Youth unemployment in China has stayed in the mid-to-high double digits in recent years, even as the overall urban unemployment rate hovers around 5%. Preparing the next generation for a job market transformed by AI is no longer optional — it’s urgent.
China’s AI ecosystem by the numbers
Meanwhile, the artificial intelligence ecosystem in China keeps growing. Zhipu AI, also known as Knowledge Atlas Technology, reported that its revenue doubled over the past year, jumping 132% to 724 million yuan. However, the figure came in slightly below analyst estimates, and the company posted an adjusted net loss for the period due to heavy research and development spending.
On the manufacturing side, China’s official factory activity index rose in March to 50.4 — the highest level in 12 months and above analyst expectations. That signals the Chinese economy is heating up, which could help absorb some of the pressure that automation will eventually bring to the job market.
What this means for the future of work
The big question that remains is: will the Chinese model hold up against automation pressure in the long run? Probably not indefinitely. As AI models become more capable and deployment costs drop, the temptation to replace workers with automated systems will grow in any economy — regardless of culture or government policy. What China is doing now may be more a matter of timing than a permanent philosophy.
In the US, the debate about the future of employment is already on the table in Congress, at expert panels, and in conversations among anyone working in tech. Proposals like universal basic income, automation taxes, and government-funded reskilling programs are gaining traction — but there’s still no clear, coordinated policy. In the meantime, layoffs continue and the market keeps adjusting organically and, more often than not, painfully for those caught in the middle.
What can be said with a good deal of confidence is that no country will escape this transformation. Artificial intelligence will keep advancing, models will get cheaper and more capable, and the pressure on the job market will increase globally. The difference between the US and China today isn’t about who will face the problem — it’s about who’s facing it first and how they’re trying to manage the impact. 🤖
- US: mass layoffs, market pressure, automation as a cost-cutting tool
- China: AI-driven growth, less immediate pressure for cuts, government influence on the corporate landscape
- Global trend: inevitable convergence as technology becomes more accessible
At the end of the day, what will define the impact of artificial intelligence on employment isn’t just the technical capability of the models — it’s the choice each society makes about how to use this technology and who it decides to protect in the process. And that’s a conversation the entire world is only just beginning to have.
