COMMENTARY: A New Headache for Tech Companies in China

author: Mark Melnicoe   

The past few weeks in China have borne witness to a trend that has to be disturbing to the country's technology companies. Workers are rising up against the nation's culture known as 996 – where employees are expected to work from 9 a.m. to 9 p.m. six days a week – with only Sundays off.

It began in late March as a semi-joke when a small group of software engineers started a discussion on the code-sharing platform GitHub, which is run by Microsoft. Why that's important will come up as you read on. The group of developers called their project "996.icu" – the icu meaning that working such long hours could put workers into the intensive care unit.

The thread has gone viral, with more than 200,000 comments on the platform. Commenters created a list of more than 150 companies they said have inhumane work conditions. They include such giants as Huawei (privately held), the Ant Financial arm of Alibaba (NYSE: BABA), JD.com (Nasdaq: JD), Pinduoduo (Nasdaq: PDD) and Bytedance, a privately held firm that makes the popular Chinese app TikTok.

CEOs Defend Extra Hours

In fact, these grueling work hours are openly embraced by the likes of Jack Ma and Richard Liu, the leaders of e-commerce titans Alibaba and JD.com, respectively, and others. It's an unfortunate side of the work ethos in China.

"How do you achieve the success you want without paying extra effort and time?" Ma wrote this month in his blog.

Liu, for his part, said workers seeking a semblance of work-life balance are "slackers" and are not welcome at his company, which is second behind Alibaba in China's world-leading e-commerce market.

In a WeChat post under a pen name, Zhu Ning, the founder and CEO of Hangzhou-based e-commerce firm Youzan, said that his company's human resources department informed every new hire that working at Youzan meant "huge pressure, where many have already treated long work hours as a habit and can't really tell work and life apart," according to the research firm Dezan Shira & Associates.

Perhaps reaching a breaking point, users on GitHub started listing companies that put their workers through the 996 misery. The comments quickly grew into one of the fastest-growing threads in the history of GitHub.

Worrisome Future

Perhaps this is a natural outgrowth of China's economic cycle. Slavish work hours were a thing in Silicon Valley in the 1980s and ‘90s, as well, when tech firms were growing rapidly before the dot-com bubble burst at the end of the ‘90s. The ensuing layoffs and corporate failures changed that culture.

Now it's Chinese workers' turn to be worried – and tired. Breakneck economic growth that has occurred since reforms were introduced 40 years ago is finally slowing. Jobs are harder to come by. Many tech companies are cutting back.

According to Fortune magazine, the privately held ride-hailing firm Didi Chuxing may ax 15 percent of its workers. Tencent Holdings Inc. (HKEX: 0700), maker of the ubiquitous WeChat social media platform and a top gaming company, is targeting a 10 percent reduction in management staff, Fortune reports. JD.com is reported to be ready to lay off 8 percent of its workforce, or about 12,000 people. The list goes on.

Microsoft Brethren

A big question for tech companies now is whether this will turn into a rebellion by workers or simply melt away. That's where Microsoft (Nasdaq: MSFT) comes in.

The Redmond, Wash.-based software giant owns GitHub, and Chinese authorities have already blocked the online discussions at GitHub on domestic web browsers. But they have not blocked GitHub itself and so far have not asked Microsoft to scrub the 996 discussion.

In an unusual move, Microsoft workers are trying to head off any such limitations on GitHub by expressing solidarity with their Chinese brethren.

"We must entertain the possibility that Microsoft and GitHub will be pressured to remove the repository," they said in an online petition placed on GitHub.

"We, the workers of Microsoft and GitHub, support the 996.ICU movement and stand in solidarity with tech workers in China," they went on. "We know this is a problem that crosses national borders. These same issues permeate across full time and contingent jobs at Microsoft and the industry as a whole."

The workers said they "encourage Microsoft and GitHub to keep the 966.icu GitHub repository uncensored and available to everyone."

Culture Change Coming?

Two of China's neighbors – Japan and South Korea - have dealt with overworked employees for a long time. Not coincidentally, those countries have two of the highest suicide rates in the world among developed economies. Taking notice, Japan has just capped overtime to 45 hours a month, and South Korea cuts its maximum workweek last year from 68 hours to 52 hours.

While China's overall suicide rate is far lower, workers at tech companies, such as those owned by Foxconn, have killed themselves on the floors of factories infamous for their inhumane work hours. Human Rights Watch and others have documented countless cases of Chinese factories treating workers like robots.

Now, some of those workers in the Middle Kingdom are fighting back. The fear for tech company executives, already dealing with the economic slowdown, is that the movement will catch fire and perhaps lead to a cultural change in China that places greater value on work-life balance.