Tencent Cuts 5,500 Jobs in First Quarterly Workforce Decline Since 2014 as Revenue Falls
Chinese tech giant Tencent on Wednesday posted its first drop in quarterly revenue since going public, as the company grapples with China's economic downturn, pandemic disruptions and ongoing scrutiny from regulators. Revenue in the second quarter fell three percent to CNY 134 billion (roughly Rs. 1,57,000 crore) compared to the year before, while profits plunged by 56 percent to CNY 18.6 billion (roughly Rs. 21,800 crore), an earnings statement said.
Tencent also cut around 5,500 jobs down to 110,715 employees by the end of June, the first quarterly decline in workforce since 2014.
"We actively exited non-core businesses, tightened our marketing spending, and trimmed operating expenses, enabling us to sequentially increase our non-IFRS earnings, despite difficult revenue conditions," the company said in the statement.
Around half of Tencent's revenues came from fintech and business services as well as online advertising, which would position the company for growth when China's economy expands, the company added.
China has spent months cracking down on the video game industry to fight addiction among children, cutting into profits of giants like Tencent and its rival NetEase.
Beijing started approving new video games again in April after a hiatus, but no Tencent games were on the list, meaning it must rely on older titles like Honor of Kings for revenue.
Tencent said China's domestic gaming market was facing "transitional challenges", while the international market was in a "post-pandemic digestion period" as people resumed spending on other entertainment avenues.
Online advertising revenue fell a record 18 percent in the second quarter year-on-year, which reflected "notable weakness in the Internet services, education
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