The gambit seems to be paying off—at least so far. 

Big share buyback announcements this week by e-commerce giant Alibaba Group Holding and smartphone maker Xiaomi triggered sharp gains in shares of those companies—and in other Chinese tech firms investors expect to follow suit.

On Tuesday, shares of Alibaba Group Holding soared 13% in New York after the company said it would increase its share buybacks to $25 billion over the next two years. Xiaomi’s shares also jumped Tuesday after the company announced better-than-expected earnings and a $1.28 billion share buyback.

The Alibaba and Xiaomi buybacks created market windfalls for other China internet firms that have yet to confirm similar programs. Among them: online gaming and social media behemoth Tencent Holdings and online shopping leader Meituan. On Wednesday, shares of both companies jumped about 3%. 

Shares of China’s leading internet players have risen steadily since March 16 when vice premier Liu He, China’s top economic planner, issued a rare public promise of state support for markets and a policy boost for the economy during the year’s first quarter. The gains of China’s largest internet companies over the past week aren’t nearly enough to erase the huge share price declines they have suffered over the past 18 months. But many analysts hope the week’s advances signal the beginning of a comeback for the sector.

Tencent contributed to the improvement in market sentiment after trading in Hong Kong closed Wednesday by announcing that its profits in the fourth quarter of 2021 surged to about $15 billion, a 60% increase over the same period the previous year and more than three times analysts’ expectations. 

But Tencent said quarterly revenue grew just 8%, the company’s slowest quarterly growth since listing shares in 2004. Analysts attributed the slowdown to tight restrictions imposed last year on the amount of time Chinese children can spend playing online games, as well as regulators’ near-complete dismantling of China’s online tutoring industry, which had been one of Tencent’s leading advertisers.

A slew of Chinese internet companies—including Tencent, Alibaba, Meituan—are reportedly planning huge job cuts in response to Beijing’s regulatory clampdown. Such retrenchments would bolster profitability and thereby cheer investors.

The Wall Street Journal, citing anonymous sources, reported Monday that Tencent is planning to cut thousands of employees from some of its biggest business units, including a fifth of staff at its cloud computing business. 

The Journal said Alibaba already has begun layoffs that could result in the dismissal of thousands throughout the year, while ride-hailing app operator Didi Global will axe 2,000 employees.

Reuters, citing unnamed sources, reports that Alibaba is preparing to sack 15% of its total workforce, or about 39,000 staff.

Widespread layoffs by China’s internet companies would pose a vexing dilemma for Beijing. On the one hand, China’s policy planners want to reverse the freefall in the share price of Chinese internet companies on both domestic and overseas exchanges. But stock buybacks and mass layoffs are a high price to pay to assure a rally. The buybacks, although most Chinese tech giants can afford them, will only enrich investors. And layoffs will clash with Chinese President Xi Jinping’s stated goal of ensuring “common prosperity” and equal economic opportunity for all.