(Yicai Global) April 1 -- Shares of Renrui Human Resources Technology Holdings edged up after the HR outsourcing services provider logged a 68 percent surge in annual revenue, despite mass redundancies at Chinese internet and online tutoring firms in the wake of a regulatory crackdown.

Renrui HR [HKG: 6919] finished 1.3 percent higher today at HKD8.41 (USD1.07), after earlier soaring as much as 3.9 percent.

Revenue came in at CNY4.7 billion (USD476.1 million) in the 12 months ended Dec. 31, thanks to a big increase in the number of flexible employees at clients, the Chengdu-based firm’s 2021 earnings report showed yesterday.

Net profit slumped 41 percent to CNY116.8 million (USD18.4 million) because Renrui HR lost its biggest customer, TikTok operator ByteDance, and higher research and development expenses and administrative costs, the company said.

Corporate layoffs are not only about employee numbers, but also about positions and business scenarios of a company, founder and Executive Director Zhang Jianguo said. Staff in certain positions are more likely to be laid off, while other departments may need more, he noted, adding that businesses are considering more elastic options, such as flexible employment, flexible hiring, and project-based work, to adapt to changes and lessen risk.

The flexible employee count at client firms jumped 31 percent to 50,447 by the end of 2021 from the year before. The demand for labor at internet and edtech companies slumped in the year, so Renrui HR’s gross profit margin shrank to 5.3 percent from 9.6 percent and its gross profit fell to CNY252 million from CNY271 million.

With regards to the redundancies at internet firms, Zhang said that the workers who leave with know-how in artificial intelligence and big data can move to many other sectors, including high-end smart automotive, autonomous driving, big data analytics, and the mobile internet.

Editor: Futura Costaglione