New Delhi: Chinese internet giant Alibaba Group's subsidiary UC web has laid off 90% of its 350-strong workforce in India after a ban on 59 Chinese-origin mobile Apps, including short video App Tik Tok, UC Web’s browser, and its two other products, it has been reported. The development comes at a time as a government committee with representatives from several ministries is probing allegations of espionage against these Apps.
Mint reported that the employees of the Apps have been informed verbally over video-conferencing about the lay-offs. According to another report by Reuters on Thursday, several employees have been communicated through a company letter about their termination.
“This termination is on account of the ban imposed by the government of India on UCWeb and Vmate, hampering the company’s ability to continue providing services in India,” stated the company letter dated July 15 to the employees of UC Web’s UC Browser, UC News and its short video App, Vmate.
According to the Reuters report, another banned App, e-commerce service provider called Club Factory (CF), has invoked a “force majeure” clause - freeing it from contractual obligations from its Indian sellers. CF has about 85-90 direct employees in India.
On June 29, India banned 59 Chinese Apps following rising tension with neighbouring China along the border in East Ladakh in which 20 Indian soldiers were killed in a face-off.
In its ban notice, the Ministry of Information and Technology stated that it “has received many complaints from various sources including several reports about misuse of some mobile apps for stealing and surreptitiously transmitting users’ data in an unauthorised manner to servers which have locations outside India”. The ban has been enforced under Section 69A of the Information Technology Act, 2000.
Subsequently, a committee has been formed with representatives from the Ministry of Home Affairs, Ministry of Electronics & IT, Ministry of Information & Broadcasting, and Law & Justice, along with Sanjay Bahl, director general of CERT-In, to probe the allegations.
In a statement, Nikhil Gandhi, head of TikTok, India, had said the company has been invited to meet “government stakeholders concerned for an opportunity to respond and submit clarifications.”
Tik Tok has about 100 million active users in the country and thousands of them have made their career as influencers through the App.
Tik Tok, owned by ByteDance, has about 2,000 employees in India. Last year, ByteDance announced its plans to invest $1 billion in India as the country had become its biggest overseas market.
While it is not yet clear why Alibaba chose to lay off its Indian employees of the banned Apps in spite of a pending probe by the Indian government, the move, however, indicates that jobs of several thousands of Indian employees with the banned Apps are at stake.