Chinese search and AI leader Baidu has started laying off employees after reporting a rare third-quarter loss, according to people familiar with the matter. The job cuts, which began quietly this week, are part of a broader cost-reduction effort as the company faces tightening competition and slowing digital ad revenue.

➤ Internal Teams Among First to Face Job Reductions

Sources indicate that the layoffs are affecting multiple departments, including cloud services, autonomous driving, and some AI development units. While the scale of the downsizing remains unclear, early estimates suggest that hundreds of roles may be impacted across operational and technical divisions.

➤ Revenue Growth Slows as Core Business Faces Pressure

Baidu’s latest earnings report showed that the company slipped into a net loss in Q3, driven by weaker advertising demand, a slump in online marketing from key industries, and heavier investment in AI models and computing infrastructure. Despite strong user engagement on its search and content platforms, profitability has tightened sharply.

➤ AI Investment Costs Continue to Rise

The company has poured significant resources into expanding its ERNIE AI ecosystem, cloud computing, and autonomous vehicle research. Analysts say Baidu’s aggressive AI spending, combined with China’s broader economic slowdown, has forced the tech giant to reevaluate internal expenses.

➤ Market Reaction and Future Outlook

Investors reacted cautiously to the company’s earnings, with Baidu’s shares dipping after the results were disclosed. Sector analysts expect Baidu to continue its restructuring into early 2026, focusing on leaner operations and targeted innovation in AI and enterprise cloud services.

➤ Company Yet to Issue Official Statement

As of now, Baidu has not publicly confirmed the layoffs. However, employees on internal social networks and job-focused forums have reported receiving notices, fuelling speculation that the company is preparing for a multi-phase downsizing plan.