Q2 Revenue Dip Forces Tencent To Lay Off Thousands Of Workers

After several years of growth, Tencent has seen its first revenue drop since the Chinese video game company was publicly listed in 2004. The company’s Q2 2022 earnings report shows a 3% dip in its quarterly revenue compared to the same quarter last year at roughly $19.6 billion compared to Q2 2021’s total revenue of $20.2 billion. Total profit for the period also dropped 14% year-over-year at $5.5 billion.

The decline in revenue and profits for the company has forced it to lay off 5,500 employees in its first round of layoffs since 2014. The company’s comparatively low earnings for the quarter is attributed to several factors including the effects of inflation and the Chinese government’s sweeping crackdown on video games and online services. According to Bloomberg, the crackdown has resulted in a whopping $1 trillion drop in the combined market value of Chinese tech companies in 2021.

Revenue from Tencent’s popular titles, including PUBG Mobile, League of Legends, Honour of Kings, Brawl Stars, and Moonlight Blade Mobile, also dropped during the last fiscal quarter which the company attributes to people returning to work now that the pandemic has died down a fair bit. Valorant reportedly continues to perform well while other titles, such as V Rising and League of Legends: Wild Rift, were able to generate incremental revenue but apparently not enough to make up for the decreased spending on other games.