top of page
  • snitzoid

China's feeling the economy pain too?

Tencent, ByteDance Implement Fresh Layoffs Amid China’s Economic Pains

Latest round of job cuts at Chinese tech giants comes even as Beijing signals easing of its regulatory campaign against the sector

China’s Tencent is backing the developers of blockbuster videogames such as “Pokémon Unite” and “League of Legends.” But Beijing’s crackdown on the industry at home, including when minors can play online games, could affect the company’s global videogame empire.

By Raffaele Huang, WSJ

June 30, 2022 8:03 am ET

China has been signaling an easing of its regulatory campaign against the technology sector, but the country’s tech giants are moving ahead with more job cuts as growth stalls.

Companies including Tencent Holdings Ltd. TCEHY -2.18%▼ and ByteDance Ltd. are implementing fresh layoffs affecting thousands of employees in their latest round of cost-cutting, current and former employees said. These job cuts come on top of the tens of thousands of employees already axed by Chinese internet companies since late last year after Beijing’s regulatory crackdown swamped the sector.

Previous job cuts were mostly focused on restructuring loss-making businesses and noncore segments. But as the Omicron variant of Covid-19 prompts harsh lockdowns, roiling the Chinese economy, some companies are extending layoffs to core businesses.

The fresh round of layoffs points to the scars that the regulatory assault and macroeconomic headwinds have left on some tech companies—a worrisome development for Chinese officials as they turn in part to tech giants in hopes of salvaging a slowing economy and worsening employment landscape.

In recent months, top officials have pledged to support China’s digital economy and encouraged its tech giants to develop core technologies such as artificial intelligence, as well as infrastructure that would support areas including industrial internet and cloud computing. Since then, tech-company stock prices have bounced back from multiyear lows.

“Macroeconomic risk has overtaken regulatory risk,” said Kelvin Ho, an analyst focused on Chinese internet companies at Fitch Ratings. “As growth slows, companies will have to rethink their appropriate business structure,” he said.

In the U.S., big tech companies including Twitter Inc., Microsoft Corp. and Tesla Inc. have begun reducing the number of employees or slowed their recruiting efforts as economic uncertainties grow, following earlier periods of rapid expansion.

Tencent, whose revenue barely grew in the quarter ended March 31, plans to cut employees across different business groups through the end of this year, according to employees briefed on the matter. The job cuts will extend to some core businesses and will likely hit some senior managers, the people said.

The team operating WeChat, Tencent’s ubiquitous chat, social-media and payments app, is letting go of dozens of employees working on its short-video service Channels, some of them said.

The company’s videogame unit has started cutting dozens from a team that runs gamer communities, some of the people said. Multiple in-house game developer studios might also trim staff in the coming months, they said, as Tencent anticipates fewer title approvals from the government and streamlines its focus on games with big budgets.

The final number of employees to be reduced hasn’t been decided yet, but it could involve at least hundreds of people, some of the employees familiar with the plan said.

The job cuts are part of Tencent’s recent campaign to control costs and improve efficiency. In late May, the company told staff that promotions no longer mean automatic salary increases, according to a memo seen by The Wall Street Journal. It has also urged senior managers to pay closer attention to cost management, risk control and compliance, according to another memo.

Tencent didn’t respond to requests for comment.

Tencent plans to cut employees across different business groups through the end of this year, employees briefed on the matter said.


At ByteDance, the Chinese owner of short-video app TikTok, the fresh round of layoffs is hitting its videogame business, once a promising growth area. Beijing-based ByteDance tapped into the gaming industry in 2019 and bought several established game studios, aiming to challenge Tencent’s dominance in the sector. But those ambitions have been thwarted by regulatory and economic pressures.

Since May, ByteDance has let go of more than half of the roughly 300 employees working at a Shanghai-based videogame-development studio that was dissolved earlier in June, according to current employees. It has also cut dozens of people from a game-distribution unit, they said.

Separately, ByteDance is cutting around 3,000 additional people from its education unit as it faces lukewarm demand in that sphere, current and former employees said. Those cuts come on top of the thousands of employees that ByteDance laid off from the unit after Beijing tightened rules on online tutoring in July 2021. It will retain nearly 1,000 employees in the unit to run businesses aimed at adults and focused on smart devices, the people said.

Chinese video-streaming platform Bilibili Inc., meanwhile, has been cutting people from some of its core business segments such as videogame and live-streaming since May, according to current and former employees. In June, Bilibili’s Chief Executive Rui Chen said on a call with analysts that cutting costs and improving efficiency would be the most important task for the tech industry in the coming few years.

ByteDance and Bilibili didn’t respond to requests for comment.

Even as they trim jobs in some areas, Chinese tech giants are still hiring for other new business lines where they see growth potential, including the metaverse—virtual spaces where people interact via digital avatars.

Tencent has set up a business unit focused on immersive technologies such as virtual- and augmented-reality, Steven Ma, Tencent’s senior vice president, said this week, according to a transcript of remarks shared by the company. The unit will develop software and, in a rare move for the company, hardware products, Mr. Ma said. Tencent aims to build a team of some 300 employees, according to employees familiar with the plan.

Tencent is also expanding its teams overseas as the company shifts to developing more videogames targeting players world-wide rather than just within China, Mr. Ma said.

ByteDance is still recruiting people for various positions in China and overseas, according to employees and external headhunters. This year, most employees of virtual-reality startup PoliQ have joined ByteDance’s virtual-reality headset unit, Pico. ByteDance bought Pico in August last year.

Write to Raffaele Huang at

Appeared in the July 1, 2022, print edition as 'China’s Tech Giants Target New Layoffs As Business Slows'.

1 view0 comments

Recent Posts

See All

Zelensky claims only 31,000 Ukrainian Troops killed?

A year ago, former Army officer Colonel Douglas Macgregor put the total at approx 400,000. That number has hypothetically grown significantly. Do I believe Macgregor? Yes. The carnage suffered by pro

I'm concerned this may decimate professional bowling!

Hauling this guy away in irons mid-tournament is unforgivable. There's goes the PBA's (Professional Bowlers Association you ignoramus) endorsement deals with Toys-R-US, Kool-Aid, Facebook, Marvel Movi

Post: Blog2_Post
bottom of page