The glass curtain wall of Baidu's headquarters building still shines in the cold winter wind, but the employees in the building are ushering in an unprecedented cold wave of layoffs.

On November 18, Baidu handed over its third-quarter report card, with a net loss of 11.2 billion yuan, which became Baidu's largest loss in a single quarter since its listing.

Although Baidu quickly explained that net profit should be 2.6 billion yuan after excluding the impact of long-term asset impairment, this does not seem to have eliminated investors' concerns. After all, just a week later, news of large-scale layoffs began to spread within Baidu.

According to Caixin and other reports, Baidu recently launched the largest personnel adjustment in recent years, involving multiple departments in different business lines, with layoffs ranging from 10% to 25%, and individual departments as high as 30%.

Some employees described the layoffs as more than the year-end adjustments of previous years. Although company insiders call it a "normal year-end adjustment", many Baidu employees feel unprecedented shocks.

1. The main business stalled

One of the core reasons for Baidu's performance avalanche is the serious stall of its pillar business "online marketing".

In the third quarter, Baidu's online marketing business revenue was 15.3 billion yuan, a decrease of 3.5 billion yuan from the same period last year, and a year-on-year plunge of 18%. This is the sixth consecutive quarter of decline in the sector since Q2 2024, and the subduction speed has been accelerating.

Compared with the entire Internet advertising market, the situation is more severe.

In contrast, Baidu seems to be being ruthlessly abandoned by advertisers.

The migration of user habits is the key reason for the weakness of Baidu search ads. In the past, "ask Baidu if you don't understand", but now it has become "Xiaohongshu to find a guide, Douyin to read evaluations, WeChat search, Taobao to buy things", and Baidu's search entry position has been continuously weakened.

According to the QuestMobile report, in June 2025, Baidu's media status index has fallen to ninth place, ranking behind Douyin, Taobao, WeChat, Kuaishou, and Xiaohongshu. This shift in user attention has directly led to a restructuring of advertisers' budgets, with more than 60% of advertising budgets flowing to platforms such as Douyin, Taobao, and WeChat, while Baidu's proportion of advertising revenue has dropped from 90.1% in 2016 to 54.8% in 2024.

Baidu's advertising business dilemma is essentially a misalignment in the choice of technical routes.

In the age of AI, users have shifted from "link jumps" to "content is the answer," and the click-through rate of search ads has declined due to AI-generated content. Although Baidu has launched an AI search function, its core is still advertising-oriented, and it has not been able to truly reconstruct the product experience centered on user needs.

This "advertising logic" rather than "product logic" has led Baidu to miss the opportunity to become a platform in every technological change.

2. It is difficult to support a single tree

In the face of the decline of traditional businesses, Baidu is making every effort to switch AI narratives.

Some time ago, Robin Li also made a generous speech at the Baidu World 2025 Conference, showing the commercialization progress of core products such as Radish Running, Famou, and Miaoda, and depicting Baidu's AI blueprint with words such as "getting the match point" and "writing a new narrative of growth".

In the third quarter, Baidu disclosed AI business revenue for the first time, with a scale of nearly 10 billion yuan, a year-on-year increase of more than 50%. These revenues come from the Troika: AI Cloud, which grew by 33%; Radish Run, which soared 212% year-on-year; and the native commercialization of AI such as agents and digital humans in the mobile ecosystem.

However, Baidu's investment in AI transformation has exceeded 100 billion yuan, but the AI-related business revenue in the third quarter only reached about 10 billion yuan, accounting for only 30.8% of the total revenue, which is difficult to make up for the gap caused by the decline in traditional business. Moreover, looking closely at each AI business line, Baidu's situation is not optimistic.

Among the large model applications for the C-end, Baidu's Wen Xiaoyan was almost the earliest to be launched, but the monthly active users just exceeded 5 million, ranking ninth in the monthly active user ranking of native AI apps, far from Byte's Doubao, DeepSeek, Tencent's Yuanbao, etc.

Robin Li's high hopes for Radish Run soared to 3.1 million orders this quarter, and its safety was fully verified. However, the cumulative order volume of 17 million is still far from the critical point of 50 million orders mentioned by Robin Li.

In terms of cloud computing, Omdia's "China AI Cloud Market, 1H25" report released in September 2025 shows that Baidu Cloud accounted for only 6.1% of China's AI cloud market in the first half of 2025, far lower than Alibaba Cloud, Volcano Engine and Huawei Cloud.

3. Metabolism

Baidu has been working hard to tell a new AI story to the capital market, hoping to achieve value revaluation. But at present, investors do not seem to have bought it, and the capital market has shown concern about Baidu.

Two months ago, international rating agency Fitch downgraded Baidu's long-term foreign and local currency issuer default rating outlook from stable to negative. Fitch pointed out in the rating report that the continued decline in Baidu's online marketing business poses a challenge to the overall revenue stability, while it will still take time to realize the large-scale realization of the AI business, and it is difficult to fully hedge the decline of traditional business in the short term.

It is in this context that Baidu made this decision to lay off employees with a broken arm.

According to a number of media reports, Baidu's layoffs involve multiple offices in Beijing, Shanghai, Guangzhou and other offices, and the mobile ecological business group (MEG) has become the hardest hit area, with some of its subordinate business lines such as search, live broadcast, and games laying off as high as 20%-30%.

It is understood that the layoffs are mainly aimed at newcomers who have been with the company for less than a year, older old employees, and employees who have not been promoted or have low performance for two years, and the compensation plan varies according to the identity of the employee: most newcomers/fresh graduates are N+1.5, and old employees can reach N+3 or even N+3.5 (including year-end bonuses and signing fees).

Behind this round of layoffs, Robin Li's "metabolism" philosophy is the core logic of Baidu's organizational change.

At an internal executive meeting in 2025, Robin Li made a rare systematic reflection on the company's organizational culture, pointing out that the reason for Baidu's "inability to win the battle" is "not focused enough", emphasizing the need to adhere to metabolism and prevent organizational rigidity. This change of iron-blooded wrist reflects Baidu's sense of urgency to survive in the AI era.

It is worth noting that Baidu is also accelerating AI talent recruitment while laying off employees. In 2025, AI-related positions will account for more than 90% of the school's recruitment, and it plans to issue more than 4,000 recruitment quotas and add 90 new positions covering cutting-edge directions such as multimodal and cross-modal.

On the one hand, the search advertising business continues to decline, and on the other hand, it is difficult for the AI business to take the lead. Behind the layoffs, Baidu is undergoing a difficult and necessary transformation.

The biggest test facing Robin Li and his team is: after the collapse of the moat of the traditional search business, can they find a really solid new growth point in the AI track?

The lights in Baidu's office building may still be bright all night, but what is illuminated at this moment is no longer the excitement of innovation and breakthroughs, but the weight of survival and transformation.

On a winter night in Beijing, the chill at Baidu headquarters is getting stronger.