Singapore Markets closed

Tencent is said to target 10% of managers for job cuts, demotion

Tencent employees queue up to get red envelopes from Tencent founder Pony Ma Huateng outside the company’s headquarters in Shenzhen. (Photo by Zou Bixiong/VCG via Getty Images)

By Lulu Yilun Chen

(Bloomberg) — Tencent Holdings Ltd. is putting about 10 percent of its managers on notice, as China’s largest gaming and social media company shakes up its workforce amid cooling growth and intensified competition, according to people familiar with the matter.

President Martin Lau told an internal meeting late last year that its lowest-performing general managers will need to leave the company or be demoted, mainly because not much staff-pruning has occurred in the past, the people said, asking not to be identified talking about a private matter. Jane Yip, a spokeswoman for the company, didn’t respond to a request for comment.

The move comes as Tencent climbs out of one of its deepest troughs. Chinese regulators froze gaming approvals for nine months in 2018, walloping the company’s bread-and-butter business. The world’s eighth most valuable company is also fending off competition from Alibaba Group Holding Ltd. and newcomers like Bytedance Ltd. that’re siphoning user attention with short video apps.

Tencent follows a slew of Chinese tech companies from JD.com Inc. to ride hailing Didi Chuxing that’re shaking up their ranks to tide them over tougher times. Funding has shrunk alongside a cooling in the nation’s economy, the world’s second largest. That’s exacerbated by trade tensions with the U.S. and regulatory clampdowns that fomented uncertainty and spooked would-be investors. Chinese venture capital deals in the December quarter were down 25 percent and at their lowest since 2015, according to market research firm Preqin.

© 2019 Bloomberg L.P