China’s Tencent has informed staff it will not guarantee them a pay raise upon promotion as it reviews its salary policy amid a cost-cutting drive, Reuters news report said.
The Chinese social media and gaming giant told its employees of the policy change on Tuesday, saying the decision was taken as part of a yearly review in consideration of the company’s operation plan and the external environment.
Tencent said the company would still conduct an annual salary review to consider an individual’s contribution and performance.
Tencent, which declined to comment on Wednesday, told staff in 2020 it would no longer guarantee an annual salary rise.
Tencent, China’s most valuable company, reported quarterly earnings last month showing profit halved from a year earlier and revenues stagnated, its worst performance since it went public in 2004.
Tencent Founder and Chief Executive Officer Pony Ma told analysts the company had implemented cost control measures and scaled back non-core businesses in the first quarter. He said it was looking to achieve a more optimized cost structure going forward.
Tencent, the operator of the WeChat messaging platform and the world’s largest video game company, said ad sales slumped 18 percent in the first quarter ended March 31, following a 13 percent drop in the October-December period. Total revenue was 135.5 billion yuan ($20 billion) in the quarter, roughly the same as a year earlier.
Reuters reported earlier this year that Tencent and peer Alibaba Group planned to make numerous job cuts.