The Shenzhen-based social media and gaming company’s revenue declined three per cent to about US$20 billion in the second quarter of 2022 compared to the same period last year, missing analysts’ expectations. Net profit dropped 56 per cent to around US$2.7 billion. The firm also trimmed its workforce for the first time since 2014, laying off nearly 5,500 employees during the period. (South China Morning Post)
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The Shenzhen-based social media and gaming company’s revenue declined three per cent to about US$20 billion in the second quarter of 2022 compared to the same period last year, missing analysts’ expectations. Net profit dropped 56 per cent to around US$2.7 billion. The firm also trimmed its workforce for the first time since 2014, laying off nearly 5,500 employees during the period. (South China Morning Post)
Talking point: The contraction ends a long period of hyper-growth for the company behind social media and messaging giant WeChat. It coincides with China’s slowing GDP growth and a global slowdown in video gaming and online activity following a pandemic bump. Tencent is also grappling with regulatory challenges at home after Beijing introduced strict video game limits on kids. Along with layoffs, the company has rolled back perks, including some free meals and snacks, to help stymie losses. It’s also adjusting its salary policy to slow the rate of pay raises.
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