TikTok Is Laying Off Employees In India As Ban Becomes Permanent

The popular short video app announced Wednesday that it will cut workers in India after it had “not been given a clear direction on how and when our apps could be reinstated.”

“It is deeply regretful that after supporting our 2000+ employees in India for more than half a year, we have no choice but to scale back the size of our workforce,” a TikTok spokesperson said in a statement.

TikTok, which is owned by Beijing-based ByteDance, did not say how many workers would be affected, and it did not immediately respond to a request for comment for more detail.

TikTok made its decision public days after Indian media reported that the country plans to make permanent a ban on 59 Chinese apps that were blocked last June, including TikTok, Tencent’s WeChat and Alibaba’s UC Browser. Indian regulators at the time claimed that the apps posed a “threat to sovereignty and integrity.”

The ban was a huge blow to TikTok, which had an estimated 120 million users in India.

And though TikTok said this week that it has “worked steadfastly to comply with” authorities in the country, such efforts appear to have had little effect.

A source in the Ministry of Electronics and IT told CNN Business on Wednesday that the government decided this week to make the ban permanent because it was unsatisfied with how the Chinese companies had addressed concerns about data collection and security.

“We continually strive to make our apps comply with local laws and regulations, and do our best to address any concerns they have,” the TikTok spokesperson said. “It is therefore disappointing that in the ensuing seven months, despite our efforts we have not been given a clear direction on how and when our apps could be reinstated.”

The spokesperson added that the company hopes the app will someday be allowed to return.

High-running tensions

Tensions between China and India have been escalating since last summer, when a bloody clash along a disputed border in the Himalayas left at least 20 Indian soldiers dead.

India has banned dozens of Chinese apps since then, and reportedly moved to block Huawei from participating in India’s 5G telecommunications network. And many Indians have called for a boycott of Chinese goods and services.

The business impact may be limited for some companies, including Alibaba (BABA), which already scaled back in India following the ban.

Last August, CEO Daniel Zhang announced that the company had “decided to stop the operations” of UC Browser, a web browsing app, and other initiatives in India.

“We do not expect it to have a material impact on the group’s overall financial performance,” he told analysts during an earnings call, citing an “extensive review of the business.”

A UC Browser spokesperson declined to comment.

Tencent (TCEHY) has not yet outlined its plans.

“Tencent complies with all applicable orders and regulations, and continues to adhere to applicable laws in the jurisdictions in which we operate. We look forward to continuing to focus on our core markets and providing valuable services for our users,” a spokesperson said in a statement to CNN Business. The company declined to provide further details.

Ji Rong, a spokesperson of the Chinese Embassy in India, on Wednesday reiterated China’s opposition to the ban.

“Since last year, the Indian side has repeatedly used national security as an excuse to prohibit some mobile apps with Chinese background. These moves [are] in violation of WTO non-discriminatory principles,” she said.

Geopolitical tensions between India and China, meanwhile, have continued to simmer. On Monday, the Indian Army disclosed that there had been a “minor” face-off between Indian soldiers and China’s People’s Liberation Army.

The incident took place last Wednesday near a disputed border high in the Himalayas, and “was resolved by local commanders as per established protocols,” the Indian Army said in a statement.

— Vedika Sud, Steven Jiang, Rishi Iyengar and Manveena Suri contributed to this report.