Chinese gaming giant Tencent has developed a gap in its business armor: The company’s second quarter earnings report has posted a decline in quarterly revenue, dropping by 3% to $19.7 billion when compared to the same quarter last year, and the first for the games giant since its 2004 public listing. Gross profits further fell from $9.25 billion to $8.5 billion year-on-year.
This has had the extremely unfortunate side effect of layoffs at the company, to the tune of 5,500 staffers being shown the door. Tencent hasn’t had to reduce its staff since 2014.
The dour fiscal and employment outlook is being attributed to a number of factors, including the Chinese government policies and the overall effects of inflation. Bloomberg attributes the decline specifically to China’s ongoing “property slump and ad-hoc Covid lockdowns from Shanghai to Shenzhen” as well as the “sweeping government crackdown [that] wiped more than $1 trillion off [Chinese tech’s] combined market value in 2021.”
