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February 17, 2023
June 14, 2024

Tencent Layoffs: What Happened & Why?

In February 2023, Asia's biggest internet company, Tencent, made headlines as it began making personnel adjustments following reports of layoffs. The scale and timeframe of these layoffs remain unclear, but they have undoubtedly sent ripples through the industry. In this article, we'll delve into what happened, why it occurred, and the potential future impact on both Tencent and the tech world at large.

Why did Tencent have layoffs?

Tencent's decision to make personnel adjustments, particularly in its recently formed "extended reality" (XR) business, stems from changes in its development plans for hardware. The company denies plans to disband the business and has given the unit's more than 300 staff two months to find new internal or external opportunities. Extended reality, which includes virtual reality and augmented reality, is considered the building blocks of the metaverse, indicating Tencent's foray into hardware and its bet on the metaverse concept of virtual worlds.

It's worth noting that Tencent also fired more than 100 employees in 2022 for violating law and company policies, including suspected bribery and embezzlement. The company reported these incidents to law enforcement authorities.

Financial Impact and Future Directions

While evaluating the broader financial implications of the layoffs at Tencent, it is clear that the company is strategically realigning its workforce and modifying its development agenda, particularly within its XR business unit. Tencent’s focus is now increasingly on the integration of software and hardware tailored to the metaverse, a concept that encompasses immersive virtual worlds.

Impact on Industry

Tencent’s recent adjustments in its personnel and its sharpened focus on extended reality (XR) are poised to influence the consumer industry, potentially spearheading innovation within the metaverse and virtual worlds. These changes indicate a significant pivot in Tencent’s approach to hardware development. This could reshape how products and services are delivered in the realm of virtual interactions.


Tencent's personnel adjustments, primarily in its extended reality (XR) business, stem from changes in hardware development plans. The company denies disbanding the unit and offers staff two months to find new opportunities. These developments could drive innovation in the metaverse and virtual worlds, potentially influencing the company's future actions in the broader market or sector.