Two of China’s biggest tech companies, Alibaba and Tencent are set for a big overhaul of their workforce. The move to layoff tens of thousands of employees follows China’s recent crackdown on tech companies.

According to one of the sources close to the decision, Alibaba could end up paying off 15% of its total workforce, a value that equates to about 39,000 staff.

Tencent will also layoff employees in some of its business units. The unit overseeing businesses including video streaming and search will see a 10%-15% layoff this year.

According to sources, layoffs at Tencent will start with the company’s less profitable or loss-making businesses such as Tencent Video and Tencent Cloud.

Apart from the regulatory crackdown which has triggered the actions from major tech companies, there are other factors.

These factors include economic decline which has slowed down sales growth recorded by the companies. Companies are also experiencing difficulty in making new capital rises and business expansion.