Baidu is carrying out large-scale layoffs across multiple business units, with actions expected to continue through year-end as the company combats falling ad revenue and intensified AI competition.

In the third quarter, Baidu’s overall revenue fell about 7%, with online advertising down roughly 18%, as it loses share to rivals like Douyin and RedNote amid a broader ad slowdown.

Industry-wide headcount reductions are visible as Chinese tech firms, including Alibaba and Tencent, and U.S. players like Amazon and IBM tighten staffing amid sector-wide pressure.

Leadership changes bring a younger slate of managers to lead the Ernie project, a move seen in tech to push rising talent into AI development.

Baidu is reorganizing AI efforts into two units for foundational and application models to oversee the Ernie AI family, reporting directly to founder and CEO Robin Li.

Baidu continues to embed AI into its products—search, maps, and cloud—with more than half of mobile search results now featuring AI-generated content as part of a modernization push.

Despite AI integration, Baidu’s ad revenue decline persists, underscoring that AI features alone aren’t reversing monetization trends.

The broader industry trend suggests AI investment is consolidating among a few proven winners, with ad markets shifting toward social and short-video platforms, reshaping data use, competition, and talent needs.

Baidu is pursuing a leaner footprint and prioritizing AI as a core growth engine, but it remains uncertain whether these shifts will restore growth momentum.

Some teams could face up to 40% cuts, with the most significant reductions in the mobile ecosystem group, while AI and cloud roles are largely protected as resources shift toward AI development.

Baidu faces competitive pressure from Douyin and Alibaba/DeepSeek, and Ernie’s adoption lags behind rivals, with Ernie Bot reaching about 10.8 million monthly users as of September.