After India Bans Chinese Apps For Security Issues, Chinese App Makers Begin Laying Off Local Staff

Jul 17, 2020

TikTokWith India banning 59 Chinese apps on June 29 amid border tensions with the neighboring country, the affected companies have begun reducing their workforce in the country as they stare at huge losses.

Alibaba subsidiary UCWeb, the company behind the apps UC Browser and UC News which feature in the list of apps banned by India, has already stopped service in the country, leading to job cuts at its Gurugram and Mumbai offices.

“We have complied with the government’s recent directive concerning 59 apps and stopped the service,” a UC spokesperson said in a statement.

Earlier, in a statement on July 7, UC Browser warned its Indian users that their data will not be accessible after July 10.

“We are in the process of complying with a recent government directive… As our services may be affected, please back up all data you deem important from the UC app to your device no later than the 10th of July, 2020,” said the statement.

“After that date, your data will no longer be accessible, as services will be under review,” it added.

Meanwhile, e-commerce player Club Factory, which is also banned by India, sent an email to sellers to inform them about the suspension of a settlement of their pending dues until the ban was lifted, All India Online Vendor Association (AIOVA) said in a legal notice on Thursday.

AIOVA, which represents more than 2,000 sellers across the country, demanded immediate settlement of dues to sellers.

Not settling dues of sellers who delivered goods to consumers is a clear violation of Reserve Bank of India guidelines, the notice said.

However, TikTok, owned by Chinese unicorn ByteDance, might take the biggest hit by the ban as its largest user base (nearly 120 million before the ban came into force) is in India.

ByteDance is expecting a loss of $6 billion after three of its apps were featured in the list of 59 banned apps in India, according to a report in China’s state-run Global Times.

TikTok CEO Kevin Mayer earlier, however, reportedly assured ByteDance employees that India’s move to ban the app would not lead to salary cuts and layoffs in the country.

A Global Times report last week quoted an industry expert who said that a large number of Chinese companies may shut their India offices and let go of their local staff.

Experts expect a wave of job layoffs due to the ban on Chinese apps, said the report.