Meituan, a Chinese food delivery company, announced on Wednesday that it would be hiring 10,000 people in the first quarter of this year. This news caused the company’s shares to drop more than 6%.

Meituan is hiring in dozens of cities, including Beijing and Shanghai, in a variety of different business areas, such as technology development and customer services. The business announced that it is expanding its workforce as China’s “consumption recovery trend” quickens.

Covid-19 had a severe outbreak in China the previous year, resulting in lockdowns in Shanghai. Beijing persisted in enforcing its “zero-Covid” policy, which employs stringent measures like lockdowns and mass testing to try and stop the virus’s spread.

The Chinese economy has been harmed by this policy. China ended its zero-Covid policy at the end of last year, igniting hopes for an economic recovery that might also benefit its struggling technology companies.

In contrast to Silicon Valley technology behemoths like Microsoft and Alphabet, which have fired thousands of employees, Meituan has been on a hiring rampage.

However, China’s technology cycle has largely advanced faster than that of the United States. As Beijing implemented strict regulation in areas like antitrust and data protection, Chinese tech companies started to experience difficulties in 2021. Meituan received a $500 million antitrust fine in that year.

Chinese technology giants experienced some of their slowest growth ever in 2022 as a result of the economy’s downturn and headcount reductions at businesses ranging from Alibaba to Tencent. According to reports, Meituan also fired employees last year.

The hiring blitz at Meituan might be the first indication that China’s technology sector is considering growth once more. Lockdowns in China have helped Meituan as more people have turned to online food delivery. The company, which had been losing money, turned a profit in the September quarter as its revenue increased by more than 28% year over year.

The company’s hiring announcement, which came at a time when opinion of the Chinese tech industry is still precarious, was not well received by the stock market. Wednesday saw a 6% decline in Meituan stock.

However, domestic rival Ele.me, which is owned by Alibaba, and new competitors like ByteDance’s short video platform Douyin, which has been testing a food delivery service since December and is considering expansion, are posing more intense competition for the company.

(Adapted from CNBC.com)