- Chinese tech giants like Tencent Holding Ltd (OTC:TCEHY) and TikTok parent ByteDance Ltd implemented fresh layoffs affecting thousands of employees in their latest round of cost-cutting, the Wall Street Journal reports.
- The job cuts added on to the tens of thousands of employees already axed by Chinese internet companies since late 2021 after the domestic regulatory crackdown crushed the sector.
- Latest layoffs have extended to the companies' core businesses following China's stringent Covid lockdown as opposed to the previous ones, which focused on restructuring loss-making industries and non-core segments.
- Tencent looks to cut employees across different business groups through the end of this year, extending to some core businesses, and will likely hit some senior managers.
- Tencent saw fewer title approvals from the government and chased games with big budgets.
- ByteDance's latest layoffs hit its videogame business, once a promising growth area, and 3,000 additional people from its education unit.
- Chinese video-streaming platform Bilibili Inc (NASDAQ:BILI) slashed staff from some core business segments like videogame and live-streaming.
- The layoffs followed despite the assurance of government support towards the tech industry to boost the country's fallen economy.
- "Macroeconomic risk has overtaken regulatory risk," said an analyst focused on Chinese internet companies. "As growth slows, companies will have to rethink their appropriate business structure," he said.
- In the U.S., big tech companies, including Twitter Inc (NYSE:TWTR), Microsoft Corp (NASDAQ:MSFT), and Tesla Inc (NASDAQ:TSLA), have begun reducing employees or slowing down hiring due to economic uncertainties.
- The Chinese tech giants continue for other new business lines that see growth potential, including the metaverse.
- Price Action: TCEHY shares traded lower by 2.31% at $45.33 on the last check Thursday
