Chinese social media and gaming giant Tencent Holdings (00700.HK) is shaking up its workforce amid slowing business growth, with about 10 percent of the managers put on notice for job cuts or demotion, reports say.
Tencent President Martin Lau told an internal meeting late last year that the firm’s lowest-performing general managers will need to leave or be demoted, Bloomberg reported, citing sources familiar with the matter.
The workforce needs to be trimmed mainly because mainly because there had not been much staff-reduction in the past, he is reported to have said.
According to Chinese tech media platform 36kr, Tencent has already started the job cuts after the internal staff meeting in December.
The move would affect several dozen executives in middle management positions, holding titles such as assistant general manager, deputy general manager, and general manager, and even vice president level positions.
“We have never seen this… so many middle management leaving the company, some of whom have been here for over a decade,” 36kr quoted a Tencent insider as saying.
There will not be any official announcement or statement from the company about the layoffs, according to the source, who says the lay-off ratio may actually top 10 percent of the middle management.
The job cuts cover various groups inside the firm, including the platform and content, cloud and smart industries, corporate development, as well as multiple administrative and supporting service lines, according to the report.
In October, Tencent announced a strategic organizational upgrade, with the new Platform and Content business group established to develop social platforms including the messenger tool QQ, and content businesses such as Tencent News, short video app Weishi, etc.
It also set up the new cloud and smart industries group, to integrate the cloud business and enterprise-facing services.
Earlier this month, a media report noted that the Tencent staff rationalization plan will serve the goal of promoting younger managers to senior positions.
Tencent’s organizational restructuring comes amid a cooling in China’s technology scene and a slowdown in the broader economy, which affected older companies as well as new startups.
According to reports last month, ride-hailing platform Didi Chuxing was eliminating about 2,000 jobs or 15 percent of its workforce. Among other firms, e-commerce site JD.com is said to be planning to cut 10 percent of its high-level executive jobs this year.
However, media reports have noted that Tencent’s move is different from the layoffs in companies such as Didi, Meituan Dianping and Netease, as the actions of the other firms mainly impacted a large number of entry-level staff.
– Contact us at [email protected]