Chinese tech conglomerate Tencent, based in Shenzhen, has reportedly cut around 20% of its workforce, a report said yesterday (on 15 March 2022). According to that report, the job cuts began late last year. These cuts come as many tech companies in China have been laying off staff as well, including Tencent’s biggest rival Alibaba. These layoffs are partly a result of China’s ongoing economic downturn, trade tensions with the U.S. and other countries and domestic regulatory concerns.
Technode cited Chinese-language media outlet 36kr’s reporting on Tencent’s downsizing activities. The outlet cited “sources familiar with the matter” as saying that these cuts affect less than 20% of the company’s staff based on business adjustments. Other reports have said that around 30% of the workforce, mainly employees older than 35, would lose their jobs.
According to these sources, two of Tencent’s main business units are the main targets for downsizing. The Cloud and Smart Industries Business Group (CSIG), which runs the company’s internet and cloud services, is losing more than 20% of its workforce by the end of 2022. The Platform and Content Group (PCG) has lost 10% of staff and the numbers are increasing, employees within that group say. The PCG runs Tencent’s popular instant messaging service QQ and other multimedia content platforms.
Among the affected units within CSIG is Smart Education, which serves more than 1.1 billion users. This unit’s online educational service has suffered greatly as a result of the Chinese government crackdown on private educational companies last year. The crackdown followed an online education boom during the 2020 COVID pandemic. Other business units will absorb Smart Education’s work as a result of the job cuts.
A third business unit, the Interactive Entertainment Group (IEG), will be losing jobs as well, but not to the same extent as the others. The IEG houses Tencent Games, China’s biggest game development company. It also handles the company’s sports media platform, which broadcasts games by American sporting leagues such as the NBA and NFL. Two other business units, the Corporate Development Group and the Weixin Group, which runs Tencent’s fintech operations, are not affected by the layoffs.
Tencent is not the only major Chinese tech company to cut jobs. Its major rival Alibaba, one of the world’s largest e-commerce and retail companies, is reportedly laying off around 30% of its employees as decreased consumer spending during the economic downturn hurts its business. This reflects a wider trend of Chinese tech companies shedding staff, particularly in the online education and fintech sectors which have faced government scrutiny.
Tencent was founded in 1998 and is based in Shenzhen’s Tencent Seafront Towers. The company both runs its own businesses and owns stakes in at least 600 other companies. In 2018, it became the first Asian tech conglomerate to achieve half a billion US dollars in market value and has seen its value fall in 2021 from a high of US$1 trillion. Their instant messaging apps QQ and WeChat serve both domestic and Chinese diaspora audiences. Its Tencent Games division is China’s largest online game company and owns significant stakes in major U.S. game developers Riot Games (League of Legends) and Epic Games (Fortnite).
Chinese tech conglomerate and holdings firm Tencent has reportedly been laying off around 20% of its workforce, internal sources say.
These job cuts affect three of Tencent’s business units, particularly those responsible for its edtech and multimedia content businesses.
Tencent’s layoffs are the latest in a string of job cuts by Chinese tech companies since late 2021, including the company’s biggest rival Alibaba.