Tencent posts first revenue decline since going public, cut 5,500 jobs in second quarter

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Tencent cuts 5,500 jobs, posts first ever revenue decline

Tencent reported its first revenue decline since going public and trimmed its payroll, as the slowing economy weighed on its business.

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Tencent Holdings, China’s largest video gaming and social media company, reported its first revenue decline since its 2004 listing and missed earnings expectations, as the company trimmed nearly 5,500 employees from its payroll in the second quarter amid a slowing economy.
The Shenzhen-based giant posted a revenue of 134 billion yuan (US$19.8 billion) in the June quarter, down 3 per cent from a year ago. That was worse than the consensus estimates of 135.6 billion yuan, according to 28 analysts polled by Bloomberg.
Net income reached 18 billion yuan in the period, down 56 per cent from a year ago, missing analysts’ estimates of 25 billion yuan.
Tencent has downsized its workforce for the first time since 2014, slashing the number of employees to 110,715 by the end of June, down from 116,213 in March, according to the company. Its remuneration cost for the second quarter was 27.55 billion yuan, down from 29.2 billion yuan in the first three months of 2022.

“During the second quarter, we actively exited non-core businesses, tightened our marketing spending, and trimmed operating expenses, enabling us to sequentially increase our non-IFRS earnings, despite difficult revenue conditions,” said Pony Ma Huateng, founder and chief executive of Tencent.

“Looking forward, we will focus on enhancing the efficiency of our businesses and launching new revenue initiatives, including in-feed advertisements in our popular Video Accounts, while continuing to drive innovation through R&D.”
Tencent shares in Hong Kong rose less than 0.1 per cent to HK$303.2 on Wednesday, before the earnings results were announced.