Tencent Holdings logged its first-ever revenue decline after online advertising sales fell by a record, underscoring the extent to which China’s worsening economy is hurting its biggest corporations.
The country’s most valuable company slashed 5,000 jobs or nearly 5% of its workforce — the first quarterly drop in staffing since 2014 after layoffs rippling through the global tech sector finally hit the WeChat operator. Revenue fell a deeper-than-projected 3% to 134 billion yuan ($19.8 billion) while net income also missed estimates, plunging 56% in the June quarter.
Tencent is grappling with a deepening downturn in the world’s No. 2 economy, the product of a property slump and ad-hoc coronavirus lockdowns from Shanghai to Shenzhen. The uncertainty is wreaking havoc on businesses from advertising to cloud computing and gaming. Alibaba Group Holding this month reported its first quarterly revenue drop on record, though the results were better than feared.