Summary of Key Points
Recently, there have been rumors about layoffs and salary cuts at Tianyi Cloud. The actual situation involves personnel optimization, reduction in staff numbers, and decreased benefits. However, some exaggerated claims (such as a 10,000 yuan salary cut for all employees) have spread. These adjustments are not sudden; they are a result of the slowdown in growth at China Telecom and the entire telecommunications industry, as well as the narrowing of traditional business opportunities. Tianyi Cloud, once a key driver of growth, has seen a significant decline in performance. China Telecom is shifting its focus to AI and computing power, adjusting its workforce accordingly to prioritize technical positions. The future success of these efforts will depend on whether AI can generate stable revenue to compensate for the decline in traditional business activities.
I. The Truth About Tianyi Cloud’s “Optimization”: What’s the Difference Between Rumors and Reality?
The claim of a 10,000 yuan salary cut for all employees is a misunderstanding. It doesn’t mean that employees’ monthly salaries have been reduced by 10,000 yuan; rather, some bonuses, allowances, and benefits have been canceled or reduced (for example, the second annual bonus is no longer provided, and heat allowances have been decreased). Approximately 30% of the workforce has left the company, but not all of them were laid off; some left voluntarily. In some regions (such as Sichuan), there have been no significant layoffs, only salary cuts and stricter recruitment policies. A small number of new graduates were also persuaded to leave without a formal reason, but the company provided compensation. Overall, these changes are more about “optimization” rather than a large-scale layoff, although the reduction in benefits and the adjustment of job positions are indeed happening.
II. Why Is China Telecom Making These Changes? Both Performance Pressure and the Industry Environment Have Changed
China Telecom’s growth has slowed significantly in the past two years: service revenue only increased by 0.7% in 2025, and net profit increased by 0.5%. The first half of 2026 was even worse, with revenue declining by 3.9% and net profit dropping by 14.9% (although this was partly due to tax adjustments, the core business remained relatively stable). This is not unique to China Telecom; the entire telecommunications industry is undergoing a transition from traditional to new growth drivers. Mobile data usage and business volume continue to grow (up 17.7% in the first half of 2026), but revenue has not kept pace, indicating that traditional communication services (such as phone calls and internet packages) have limited room for expansion.
III. Tianyi Cloud’s Growth Slows Down: Is the “Second Growth Curve” No Longer Effective?
Tianyi Cloud was once a major contributor to China Telecom’s success, with revenue increasing by 67.9% in 2023. However, this growth rate dropped to 17.1% in 2024 and further to 7.8% in the first half of 2025. This suggests that the “cloud business,” once a strong growth driver, has hit a bottleneck and can no longer support the company’s growth as it used to.
IV. What Is China Telecom Turning To? Investing in AI and Computing Power, and Adjusting Its Workforce
To find new sources of growth, China Telecom is focusing on AI. Its strategic plan for 2025 is to transform its services towards cloud computing, digitalization, and intelligent solutions. This year, the company has introduced the “Token Business” initiative, aiming to turn technologies like computing power and models into usable AI services for customers. Investment in this area has increased: although total capital expenditure decreased in 2026, spending on computing power rose by 26%, rising from 25% to 35%. In the first half of the year, investment in computing power doubled, accounting for nearly half of the total expenditure. The company has also adjusted its workforce, hiring 3,909 more researchers while reducing the number of sales and maintenance staff by more than 1,000 each. Salaries are being adjusted to favor technical professionals, reflecting this shift in focus.
V. What’s the Future? Can AI Fill the Gap Left by Traditional Business?
Currently, some employees are being restructured, and benefits are being reduced, while technical positions are still in high demand. The key will be whether China Telecom’s investment in AI and computing power can generate stable revenue. If AI-based services can turn these investments into stable sources of income, they may help offset the slowdown in traditional business activities. If not, further adjustments may be necessary. This is the most critical aspect to monitor in the coming years.