By Josh Ye
HONG KONG (Reuters) - Chinese video game streaming site Huya (NYSE:HUYA) has started laying off staff, three sources close to the matter said, as more of the country's technology companies scale back after a bruising regulatory crackdown.
Huya, which is controlled by Tencent Holdings (OTC:TCEHY) and was once part of a plan the Chinese gaming giant had to create China’s answer to U.S. platform Twitch, intends to cut hundreds of staff, said the sources, who declined to be named because they are not permitted to speak to the media.
The company's Nimo TV unit, which launched in 2018 as an international version of Huya, is most heavily affected with large staff cuts already implemented.
Huya, which is one of China's largest video streaming platforms alongside rival DouYu, had 2,075 employees in 2020, according to its latest annual report.
"Given the changing market conditions, Nimo TV has made some strategic adjustments and optimisations for business, and will allocate resources to key regions in the future," a Huya spokesperson said, declining to comment about layoffs in other parts of Huya's business.
Tencent's plan to merge Huya and DouYu to create a $10 billion video game streaming behemoth was blocked by Beijing last year on antitrust grounds as part of a regulatory crackdown.
Since then, Chinese regulators have ramped up oversight of the livestreaming industry and Tencent this month shut its in-house video game streaming arm Penguin Esports.
Huya's staff cuts were first reported by local media outlets such as Tech Planet, which said that Huya’s biggest rival DouYu is also laying off many employees.
Douyu told Reuters that it is not currently conducting large-scale layoffs but making normal personnel adjustments to optimise resources.
Other Chinese tech giants, including Alibaba (NYSE:BABA) and Tencent, have been cutting staff after new regulations banned some of their old business practices and limited growth opportunities.
Chinese social e-commerce app Xiaohongshu, known as China's answer to Instagram, last week said it had cut about 9% of its workforce.