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China's Tencent starts new round of layoffs -sources

Published 11/15/2022, 04:05 AM
Updated 11/15/2022, 04:41 AM
© Reuters. FILE PHOTO: A Tencent logo is seen at its booth at the 2020 China International Fair for Trade in Services (CIFTIS) in Beijing, China September 4, 2020. REUTERS/Tingshu Wang

By David Kirton and Josh Ye

SHENZHEN, China/HONG KONG (Reuters) -Chinese tech giant Tencent Holdings (OTC:TCEHY) has begun a new round of job cuts targeted at its video streaming, gaming and cloud businesses, four sources close to the matter said.

The sources said the layoffs affect three out of Tencent's six business divisions - platform and content (PCG), which comprises of its video and news platforms, its gaming-focused interactive entertainment department (IEG) and cloud and smart industries group (CSIG).

© Reuters. FILE PHOTO: A Tencent logo is seen at its booth at the 2020 China International Fair for Trade in Services (CIFTIS) in Beijing, China September 4, 2020. REUTERS/Tingshu Wang

Two of the sources said some staff in IEG were informed last week they were being laid off. Tencent declined to comment. Reuters was not able to establish the scale of the job losses. China's technology sector continues to feel the effects of a regulatory crackdown and headwinds from zero-COVID measures that have slowed the broader economy. Tencent already cut jobs earlier this year, alongside peers, including Alibaba (NYSE:BABA) Group and smaller Chinese tech companies such as Xiaohongshu. In August, Tencent disclosed its employee numbers fell to 110,715 by the end of June from 116,213 in March.

Refintiv data shows analysts expect Tencent to report flat revenues or a small contraction on Wednesday, when it publishes third-quarter results. Tencent management have said they are focused on cutting costs and have shuttered non-core businesses in certain areas, including online education, e-commerce and game live-streaming. The Shenzhen-based company is eyeing global expansion to offset slowing growth in China. Reuters reported last month Tencent is resetting its M&A strategy to put more focus on buying majority stakes mainly in overseas gaming companies. Several U.S. tech employers, including Facebook (NASDAQ:META) parent Meta Platforms, Intel Corp (NASDAQ:INTC) and Twitter have also laid off thousands of workers in recent weeks.

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