Chinese tech giant Tencent has reportedly started a new round of layoffs. Employees at several key business units, including video games, may soon lose their jobs.
What happened?
As reported by Reuters, job cuts will affect three business divisons:
- Platform and content (PCG) — video and news platforms;
- Interactive entertainment department (IEG) — video games;
- Cloud and smart industries group (CSIG).
According to sources familiar with the matter, Tencent informed staff at the IEG division about the upcoming layoffs last week. The scale of the job cuts is unknown.
What are the reasons for mass layoffs?
- Tencent has been cutting costs since the beginning of this year. In May, it laid off staff at its cloud computing and video teams, as well as sports channels due to strict anti-Covid measures and growing regulatory pressure in China.
- In August, the company laid off 5% of its total workforce, or around 5,000 people. It later cut jobs at gaming media outlet Fanbyte.
- This is happening amid Tencent’s problems in the stock market. The company has already lost over $650 billion in capitalization since January 2021, with its shares hitting a 5-year low last month.
- To offset the losses, Tencent continues its global expansion by investing more in overseas game companies. The Chinese tech giant also plans to launch the global version of its mobile hit game Honor of Kings to reach Western audiences.