Tencent CEO Warns of Axing Some Businesses as Cost Cuts and Efficiency Highlighted

Pony Ma said it is unacceptable that some employees who still enjoy playing ball on the weekends, even their businesses “are very hard to survive”. “If you feel free from pressure of creating business, we, as the senior management, will give you the pressure,”according to the executive.

BEIJING, December 22 (TMTPOST)— Pony Ma, CEO of Tencent Holdings Ltd., delivered an unusually blunt and harsh speech when the Chinese internet giant he created was confronting with a wide range of headwinds, from the Covid-19 pandemic to the weakening economy.

Source:Visual China

With the essence goal to reduce costs and increase efficiency, Tencent in the past year managed to focus more on main businesses and scale down those peripheral businesses that were incompatible with the current and future development, and it will not just stick to the goal but also continue to ramp up the efforts in the future, “in my mind, to form a habit,” Ma stated in an internal online meeting with employees.

Tencent has shrunk a lot of business this year and "Don't tell me what opportunities (the business of) you have," Ma said, showings no hesitate to axe businesses. "How big can your (non-core business) be? What can you do if you make it bigger?" the tech tycoon asked and believed it is not effective for expansion in too many non-core businesses since the cost and energy about management the company input relatively outweigh the gain.

Noting there were lots of weaknesses found in this year’s cost cuts and efficiency improvement, Ma specially slapped the slackness. He said it is unacceptable that some employees who still enjoy playing ball on the weekends, even their businesses “are very hard to survive”. “If you feel free from pressure of creating business, we, as the senior management, will give you the pressure,” Ma said. He then cautioned some of businesses at the Platform and Content group (PCG), Tencent’s biggest business unit including social media, are running out of time for survival. Taking Tencent News for an instance, Ma said the division under PCG needs powerful reform to turn around otherwise it is meaningless to continue the operation and the whole division can shut down.

 Another key issue Tencent found during internal review and cost control is serious corruption. " I didn’t understand why we failed to expand so many businesses unless reading the (results of the investigation),” Ma said. “It is certainly. With so many loopholes being taking advantaged, it's impossible to develop (businesses)." Ma stressed the corruption is “really shocking” and quite a number of problems exposed during strict investigation this year, involving middle-rankers. "You will be scared to death if you have chance to see through it," he added.

As to one of major business gaming, Ma cautioned Tencent must focus on high-quality products as Chinese government is expected to tighten up approval of game license in the long run. He showed great expectation on the video feature of WeChat by labeling it as the most eye-catching business under the Weixin Group (WXG) , even touted it as the fundamental hope of the whole company. According to Ma, it is going to be a challenge for Tencent to facilitate e-commerce through the form of short video as his company has little experience in integrating short video with e-commence.

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