Chinese government officials spoke with US technology companies executives recently, The New York Times reported, to tell them they were expected to maintain their supply chain and production plans in China — or, face consequences.
For one of the companies they reportedly spoke to, it was too little, too late.
By the time Chinese officials summoned Dell ($DELL) executives to warn them to keep jobs in China, regardless of tariffs, the company had already begun cutting positions there. This, according to its job postings at Dell's recruiting website which Thinknum analyzed. It is yet one more example of how US technology companies have struggled against margin hazards as a result of the US-China trade war, now in its 11th month, and diplomatic or regulatory headwinds that arise unexpectedly and force them to recalibrate production and supply chain decisions on a moment's notice.
Dell Job Postings in China
Dell spent most of 2018 growing job postings in China, even after the US-China trade war began in earnest in July 2018. The company's job postings in China increased from 119 to 788, a 562% rise. But, in the time since, they have dropped sharply - to 458, representing a 42% fall.
The company's job postings in China increased from 119 to 788, a 562% rise. But, in the time since, they have dropped sharply - to 458, representing a 42% fall.
Dell Total Job Postings
Our next chart explains that China represents an outlier for Dell. Yes, the company's job postings overall in 2019 are down. But, they are only down 28%, reflecting that even as Dell cut job openings globally, it cut them more in China. But, Dell isn't alone - the tech company has plenty of Silicon Valley contemporaries also re-evaluating their future with China given its continuing rhetorical war with US President Donald Trump.
The US-China trade war may cross its one-year anniversary entrenched in a stalemate - and Chinese government officials are beginning to get defensive. A recent New York Times story explained that Chinese government officials summoned US technology executives to meetings where they were warned to not scale down supply chain or production planning in China as a result of the continuing diplomatic dispute. The companies the Times reported as being asked to meetings by Chinese officials includes Dell, as well as Microsoft. Only further complicating matters is the late 2018 Bloomberg report that accused Chinese spies, through a web of intelligence agency and technology sector sources, of installing microchips in hardware bound for US clients - including the American government.
While fewer companies appear to be ramping up hiring in China, Amazon ($AMZN) stands out as one recent example of a US tech company eager to boost its presence there - despite the fact that Amazon is shuttering its Chinese consumer site. In fact - keeping in line with other tech firms like Oracle ($ORCL) and Arrow Electronics ($ARW), even Amazon has scaled back hardware hires in China, as it grew other staffing departments there. Our final chart shows Amazon job postings for hardware development roles in China falling 55% from a peak in October 2018 to June 2019.
About the Data:
Thinknum tracks companies using information they post online - jobs, social and web traffic, product sales and app ratings - and creates data sets that measure factors like hiring, revenue and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales.
Further Reading:
- Tesla job postings in the US declines while hiring in China grows
- Oracle job postings in China plummet as trade war drags on
- Declining job postings and headcount at Arrow Electronics as China tariffs take toll