Tencent Holdings, China’s largest video gaming and social media company, has terminated job of nearly 5,500 employees in the second quarter amid a slowing economy, South China Morning Post news report said.
Revenue of Tencent fell 3 percent to $19.8 billion in the June quarter. This is the first revenue decline for Tencent since going public.
Tencent has downsized its workforce for the first time since 2014, slashing the number of employees to 110,715 by the end of June, down from 116,213 in March. Its remuneration cost for the second quarter was 27.55 billion yuan, down from 29.2 billion yuan in the first three months of 2022.
“We 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,” said Pony Ma Huateng, founder and chief executive of Tencent.
Tencent’s net income fell 56 percent to 18 billion yuan in the period.
Video gaming sales at home and abroad, traditionally Tencent’s strongest revenue driver, both declined 1 percent, reaching 31.8 billion yuan and 10.7 billion yuan, respectively. Tencent has attributed the weak performance to fewer big video game releases, lower user spending, and the implementation of minor protection measures.