Tencent, Other Chinese Companies Follow Western Counterparts In Laying off Staff As Economic Slowdown Weighs

  • Chinese tech giants like Tencent Holding Ltd TCEHY and TikTok parent ByteDance Ltd implemented fresh layoffs affecting thousands of employees in their latest round of cost-cutting, the Wall Street Journal reports.
  • The job cuts added on to the tens of thousands of employees already axed by Chinese internet companies since late 2021 after the domestic regulatory crackdown crushed the sector.
  • Latest layoffs have extended to the companies' core businesses following China's stringent Covid lockdown as opposed to the previous ones, which focused on restructuring loss-making industries and non-core segments.
  • Tencent looks to cut employees across different business groups through the end of this year, extending to some core businesses, and will likely hit some senior managers.
  • Tencent saw fewer title approvals from the government and chased games with big budgets.
  • ByteDance's latest layoffs hit its videogame business, once a promising growth area, and 3,000 additional people from its education unit.
  • Chinese video-streaming platform Bilibili Inc BILI slashed staff from some core business segments like videogame and live-streaming.
  • The layoffs followed despite the assurance of government support towards the tech industry to boost the country's fallen economy.
  • "Macroeconomic risk has overtaken regulatory risk," said an analyst focused on Chinese internet companies. "As growth slows, companies will have to rethink their appropriate business structure," he said.
  • In the U.S., big tech companies, including Twitter Inc TWTRMicrosoft Corp MSFT, and Tesla Inc TSLAhave begun reducing employees or slowing down hiring due to economic uncertainties.
  • The Chinese tech giants continue for other new business lines that see growth potential, including the metaverse.
  • Price Action: TCEHY shares traded lower by 2.31% at $45.33 on the last check Thursday
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