Beijing: After eliminating 5,500 jobs in the previous quarter, Chinese internet giant Tencent Holdings cut 1,879 positions in the third quarter, further reducing its workforce as it comes under scrutiny from Beijing and a slowing global economy.
Tencent revealed in its earnings report on Wednesday that it had 108,836 employees as of the end of September. This was up 1.4% from the 107,348 employees during the same period last year, but down 1.7% from the payroll size of 110,715 in the previous quarter.
Since the peak of the first quarter, the social media and video game giant has dropped a total of 7,377 positions.
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Tencent's workforce continues to decline, following several rounds of layoffs earlier this year as part of the company's cost-cutting initiatives in response to economic and regulatory headwinds affecting critical businesses such as gaming and advertising.
This year, China's tech industry, which has historically been a major driver of job growth, has seen significant job losses, especially among the young and educated population. At the end of October, the urban unemployment rate was 5.5%, but the rate for those aged 16 to 24 was 17.9%.
The loss of jobs in companies such as Tencent has also had an impact on entrepreneurship in the nation. Another 11.6 million graduates are expected in China next summer, and many of them are eyeing government jobs because they are seen as more secure than those in the private sector.
The Shenzhen-based company reported revenue of 140.1 billion yuan (US$20 billion) in the September quarter, down 2% from the third quarter of the previous year. Net income rose just 1% to 39.9 trillion yuan.
This month, Tencent began a new round of layoffs that affected employees in Shenzhen and Shanghai, according to an employee who wished to remain anonymous because the details are private. Again, those working for the company's cloud division have been among the worst affected.
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The recent job cuts are a "minor adjustment" to how some business units have evolved, according to another employee. The person claimed that extensive layoff plans to reduce costs had been completed by the end of the third quarter.
According to Reuters, Tencent recently made new layoffs across its cloud, gaming and video streaming businesses. Tencent chose not to respond.
Since April, there have been at least two rounds of layoffs at companies such as cloud computing and video platforms that have suffered significant losses. Other cost-cutting measures, such as ending free breakfast and dinner for contract workers and changing its pay policy to slow the pace of wage growth, were implemented alongside the previous round of job cuts.
The headcount will still be higher by the end of this year than in 2021, according to Tencent President Martin Lau Chi-ping, who said in March that the company would exit or streamline some noncore businesses to control headcount.
The world's second largest economy has been severely hit by the deteriorating macroeconomic environment and strict COVID-19 control measures including the lockdown. Tech companies have been particularly hard hit.
Megvi Technology, one of the world's top facial recognition businesses, made a fresh round of layoffs across multiple departments in October. In September, Shopee, the owner of the largest e-commerce site in Southeast Asia, also let go of a number of workers in China as a result of cuts to its global workforce by Singapore-based parent company C Ltd.
These actions followed significant job cuts in the second quarter, when Xiaomi, a Chinese smartphone maker, slashed nearly 3% of its workforce - more than 900 jobs - amid falling revenue. Nearly 10,000 workers were laid off by Alibaba Group Holding as the e-commerce giant grappled with declining sales. Post is owned by Alibaba.
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A slowing economy is forcing significant job cuts at international tech companies. Amazon.com will reportedly eliminate 10,000 jobs, while Facebook and Instagram owner Meta Platforms announced last week that it will lay off 11,000 employees, or 13% of its workforce.