Tencent says no plans for layoffs as company undergoes strategic upgrade
Tencent announced (in Chinese) this morning that it is undergoing a “strategic upgrade”, which involves the establishment of two new business divisions.
In response to concerns that Tencent employees might lose jobs as a result of the company-wide reorganization, Tencent said in a statement to a local news outlet (in Chinese) that no massive layoff will result from this structure adjustment. The company’s human resource department also assured that the company is still recruiting talent, however, some staff will be relocated to other business divisions.
Prior to the strategic upgrade, Tencent’s company structure was comprised of 7 main businesses. After the restructuring, the company will have two new divisions—Cloud and Smart Industries Group (CSIG) and Platform and Content Group (PCG)—added on top of the existing Corporate Development Group (CDG), Interactive Entertainment Group (IEG), Technology and Engineering Group (TEG), and Weixin Group (WXG). The company has decided to scrap three business divisions including Mobile Internet Group (MIG), Online Media Group (OMG), and Social Network Group (SNG).
The company said the CSIG will emphasize Tencent Cloud, Internet plus, smart retail, education, healthcare, security and LBS (location-based services) related industry solutions.
On the other hand, PCG will focus on integrating social networking platforms with content and technology. Ad and marketing services are also part of the new upgrade. Tencent said it will further fuse social network with videos and other media resources. Tencent has been cultivating its content business which spans from news, video, sports, anime, music to literature.
This is the third large-scale restructure that Tencent has undergone since its founding 20 years ago after the last one 6 years ago.
Tencent CEO Pony Ma said the company will focus on basic infrastructure building in the second half of the internet race. As an internet company, technology is fundamental. Ma said in the face of AI and the upcoming 5G era, Tencent will use technology as fuel for its engine to explore emerging areas such as fusing social network with content.
On top of the restructuring of existing businesses, Tencent will also form a technical committee. The company said it will strengthen research and development capabilities through internal opensource collaboration. It will also continue to invest in cutting-edge science and tech, and ramp up investment in its AI, robotics, and quantum research labs.