A Chinese tech firm operating a network of companies has been trying to recruit federal government employees who were recently laid off.
This could raise several concerns about national security – especially since the network is believed to be trying to entice former workers who might be able to provide sensitive government information. Reuters noted that the network includes four different companies working to enlist former federal employees.
Max Lesser, a senior analyst on emerging threats with the Washington-based think tank Foundation for Defense of Democracies, said some companies placing recruitment ads were “part of a broader network of fake consulting and headhunting firms targeting former government employees and AI researchers.”
Little information is publicly available on the four consultancies and recruitment companies allegedly involved in the network, which in some cases shared overlapping websites, were hosted on the same server, or had other digital links, according to Reuters’ reporting and Lesser’s research.
The four companies’ websites are hosted at the same IP address alongside Smiao Intelligence, an internet services company whose website became unavailable during Reuters’ reporting. Reuters could not determine the nature of the relationship between Smiao Intelligence and the four companies.
Lesser told Reuters that the Chinese operation employs tactics used in previous intelligence endeavors. He noted that “the network seeks to exploit the financial vulnerabilities of former federal workers affected by recent mass layoffs.”
Asked about the research, three intelligence analysts told Reuters that the network appeared to be a prime example of how foreign-linked entities are trying to gather intelligence from staff members fired or forced into retirement by President Donald Trump and billionaire tech tycoon Elon Musk’s Department of Government Efficiency.
A White House spokesperson indicated that the Chinese government is using the U.S.’s “free and open system” to gain critical information. He said “Both active and former government employees must recognize the danger these governments pose and the importance of safeguarding government information.”
The Economic Times also pointed out how these operations are similar to how Chinese intelligence agencies have tried gaining information in the past.
The tactics used by these companies resemble past Chinese intelligence operations. In 2020, a Singaporean national named Jun Wei Yeo pleaded guilty in a U.S. court to acting as an agent of a foreign power. Yeo was accused of running a fake consulting firm that recruited Americans to write reports for undisclosed Asian clients—reports that were ultimately funneled to Chinese intelligence.
Court records revealed that Yeo was taught to target individuals who were financially struggling or dissatisfied with their government jobs, mirroring the current recruitment effort aimed at laid-off federal employees. Intelligence experts warn that the same strategy is likely being used again, with foreign adversaries hoping to recruit sources who may not even realise they are providing intelligence.
This will definitely be an issue the Trump administration will have to monitor as the Department of Government Efficiency (DOGE) continues its effort to streamline government operations. There will almost certainly be more layoffs coming, and it appears the Chinese government is intent on taking advantage of these developments.
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