Tencent cuts nearly 1,900 jobs in the third quarter as tech giant struggles under Beijing scrutiny in slowing economy
- Tencent is continuing to lay off workers after slashing 5,500 jobs in the second quarter as it seeks to control costs
- The social media giant reported a 2 per cent slump in revenue amid a weakening economy that has hit the global tech sector
Tencent had 108,836 employees by the end of September, the company revealed in its earnings on Wednesday. It was 1.7 per cent lower than the payroll size of 110,715 employees in the previous quarter, but up 1.4 per cent from the 107,348 employees it had in the same period last year. The social media and video gaming giant has cut a total of 7,377 jobs since staff numbers peaked in the first quarter.
Tencent’s headcount continues to shrink after multiple rounds of lay-offs earlier this year as part of the company’s cost-cutting efforts in the face of economic and regulatory headwinds that have hit key businesses including gaming and advertising.
China’s tech sector, for years a key area of job growth, has faced massive job losses this year, especially for the country’s young and well-educated. The urban unemployment rate was 5.5 per cent at the end of October, but 17.9 per cent for those between 16 and 24 years old.
The disappearance of jobs at employers like Tencent has also affected entrepreneurship in the country. China has seen many young graduates – with another 11.6 million expected next summer – scrambling for government jobs seen as safer than the private sector.
The Shenzhen-based company reported 140.1 billion yuan (US$20 billion) in revenue for the September quarter, down 2 per cent from the third quarter last year. Net income was up by a slight 1 per cent to 39.9 billion yuan.
Tencent started a new round of job cuts earlier this month, affecting staff in Shenzhen and Shanghai, according to an employee who declined to be named because the information is not public. Employees from the company’s cloud business are again among the hardest hit.