An article about the Chinese economy published by an official WeChat account was widely forwarded among users on May 21. Subsequently, some domestic media outlets reported that Tencent CEO Pony Ma had also forwarded the article and posted a comment saying that “the description is so vivid.” A screenshot of this post was leaked, igniting heated discussion among domestic web users.
The paragraph that was described as “vivid” by Pony Ma reads: “The way some netizens care about the economy is: companies can go bankrupt, but they cannot lay off employees or employees should not work overtime. As for what is China’s economy? They don’t understand or care. The only topics they care about are chips and so-called ‘Hard & Core Technology.’ As for daily life fields such as food, clothing, housing and transportation, they seem too vulgar and unimportant. However, if these netizens order food delivery and the service got ten minutes late, they will scold food deliverymen badly, harder than anyone else.”
A few days ago, Tencent released its first-quarter financial report, revealing unsatisfactory results. Under the multiple influences of the pandemic, regulation and other factors, the growth of Tencent‘s games and advertising business is weak, and the net profit has declined for three consecutive quarters.
The financial report shows that in the first quarter, Tencent‘s revenue was 135.5 billion yuan ($20.3 billion), which was basically the same as 135.303 billion yuan in the first quarter of last year. On an IFRS basis, its net profit was 23.4 billion yuan, down 51% year-on-year, while on a non-IFRS basis, the net profit was 25.5 billion yuan, down 23% year-on-year.
Regarding the decline in net profit, Tencent management said that it will not adjust the cost structure casually due to the pressure brought by short-term factors, but will continue to control costs according to clear cost optimization priorities. An obvious measure is the contraction of recruitment. In the first quarter, Tencent‘s number of new employees totaled only 3,442, showing a slower hiring trend.