Tencent, China’s largest technology company, is continuing its layoffs amid slowing performance.
According to Hong Kong’s South China Morning Post (SCMP) on the 17th, Tencent announced in its third-quarter earnings report the previous day that the number of employees was 108,836 as of the end of September. This is a 1.7% decrease from 117,715 in the second quarter.
Tencent, which earlier cut 5,000 employees, or about 5% of its total employees, in the second quarter, sent out a total of 7,377 employees by the third quarter.
Tencent has made several layoffs this year as part of its cost-cutting efforts as its business in the game and advertising sectors has been hit directly by the slowing economy and tightening regulations.
Tencent’s third-quarter sales were announced at 140.1 billion yuan, down 2% from the same period last year.
Earlier, sales fell 3% in the second quarter compared to the same period last year, marking the first quarterly drop since listing.
The Tencent employee, who asked not to be identified, told SCMP that Tencent has begun layoffs again this month for employees in Shenzhen and Shanghai, adding that the cloud sector will be the hardest hit.
Another Tencent employee said, “The massive layoffs plan to cut costs ended in the third quarter,” adding that the recent layoff was a fine-tuning measure within a specific part.
Reuters reported that Tencent’s recent layoffs target video streaming, games, and cloud sectors.
As part of reducing costs, Tencent stopped providing free breakfast and dinner to contract employees, and changed its policy to raise wages at the same time as promotion to adjust the pace of wage increases.
China’s technology sector, which has played a key role in job creation over the past few years, has been carrying out large-scale job cuts this year, particularly among young highly educated people.
As of the end of October, China’s urban unemployment rate was 5.5%, but the unemployment rate between the ages of 16 and 24 was 17.9%.
China’s Megby, the world’s leading face recognition technology company, last month carried out new layoffs in various fields, while Southeast Asia’s top e-commerce platform Sophie fired a number of employees in China in September.
Earlier in the second quarter, Chinese smartphone company Xiaomi cut 900 employees, nearly 3% of all employees, amid a 20% drop in sales.
Alibaba, China’s largest e-commerce company, laid off 13,000 people in the first half of the year, cutting 9,000 people in the second quarter alone, while Byte Dance, TikTok’s parent company, also cut 10,000 people this year since July last year.