Chinese conglomerate Tencent fires 5.5K workers 1st time since going public, here is why

Beijing: Chinese conglomerate Tencent has fired 5,500 employees, after posting a revenue of $19.8 billion in the June quarter, down 3 per cent which is the first decline since going public.

China's largest video gaming and social media company trimmed nearly 5,500 employees from its payroll in the second quarter amid a slowing economy, reports South China Morning Post.

Tencent has downsized its workforce for the first time since 2014, slashing the number of employees to 110,715 by the end of June, down from 116,213 in March, according to the company.

"During the second quarter, we actively exited non-core businesses, tightened our marketing spending, and trimmed operating expenses, enabling us to sequentially increase our non-IFRS earnings, despite difficult revenue conditions," said Pony Ma Huateng, founder and chief executive of Tencent.

Net income reached 18 billion yuan in the period, down 56 per cent from a year ago, missing analysts' estimates of 25 billion yuan.

Reports have also surfaced that Tencent was considering selling some or all of its 17 per cent stake in Meituan, one of China's largest food delivery companies.

The company, however, denied this news during the earnings call on Wednesday.

Video gaming sales at home and globally both declined.

The company attributed the weak performance to "fewer big game releases, lower user spending, and the implementation of minor protection measures".