TikTok has announced that it will lay off hundreds of workers in India, seven months after the Chinese-owned video app was banned from what was once its biggest international market on national security grounds.
The company, whose parent is Chinese tech group ByteDance, said in a statement on Wednesday that it would reduce its current headcount of 2,000 after its efforts to restore the app in India failed.
“We have not been given a clear direction on how and when our apps could be reinstated,” said TikTok. TikTok and other Chinese apps have been banned since June following a rise in tensions between New Delhi and Beijing.
“It is deeply regretful that after supporting our 2,000-plus employees in India for more than half a year, we have no choice but to scale back the size of our workforce.”
“Hundreds” of people are expected to be laid off, said a person directly familiar with the matter, adding that dismissal letters would be handed out to employees on Wednesday.
TikTok has been working for months to restore its app in India, where it previously had 200m users, after it was banned in the country along with other Chinese-owned apps as tensions flared between the two Asian countries.
In June, 21 Indian soldiers died in a brawl with Chinese troops in the Himalayan mountains, in an episode that inflamed anti-Beijing sentiment.
Talks between India and China have failed to defuse the tension. This week, the Indian army confirmed that a “minor face-off” had taken place on January 20 in north Sikkim in the Himalayas.
Since the June clash, India has blocked more than 200 apps owned by Chinese tech groups including Tencent, Alibaba and Baidu, for “engaging in activities which are prejudicial to sovereignty and integrity of India”.
Jayanth Kolla, partner at Bangalore-based research and consulting firm Convergence Catalyst, said that TikTok users in India had migrated to rival platform YouTube during the ban.
“The company has lost both on the demand side and the regulatory side,” said Mr Kolla. “It’s a huge impact, both in terms of valuation and in terms of global growth strategy.”
The Chinese government said on Wednesday that India’s ban on the country’s apps violated World Trade Organization rules. “The Indian side has repeatedly used national security as an excuse to prohibit some mobile apps with [a] Chinese background,” said Ji Rong, a spokesperson at the Chinese embassy in New Delhi, in a statement.
“We urge the Indian side to immediately correct its discriminatory measures and avoid causing further damage to bilateral co-operation.”