Can’t even survive as a business, yet chilling on weekends: Tencent CEO

Many multinational CEOs like to end the year with a message of congratulations. Pony Ma, the billionaire co-founder of Tencent Holdings Ltd. Rampant rants about lethargic, uncaring and even corrupt staff.

Ma’s denunciation marked a rare show of frustration for the usually mild-mannered mogul who has helped build China’s biggest internet firm out of the limelight. Last week, the tycoon called a town-hall meeting to personally launch a blistering attack against the way businesses are being managed by employees ranging from social media and content to gaming. The message: All of them needed to work together, according to people who attended the 10-minute lecture, with some businesses in doubt about their survival.

“You can’t even survive as a business, yet you’re chilling on the weekend, playing ball,” Ma told his audience, according to attendees who identified themselves as describing an internal incident. Told not to go His remarks were first reported by local media outlet Jiamian. Tencent representatives did not immediately respond to a request for comment.

Tencent, which is owned by Alibaba Group Holding Ltd. Helped to set up the modern Chinese Internet industry, the past year has seen growth evaporate after a sweeping crackdown on private enterprise. The company’s gaming business came under attack from regulations designed to curb youth addiction, while an economic downturn as well as punishing Covid restrictions eroded its advertising segment. It cut thousands of jobs this year, reducing its workforce for the first time in nearly a decade.

Read also: Tencent’s revenue dropped for the first time since going public

Ma and his lieutenants have maintained a mostly upbeat tone publicly, lauding efforts to clean up Internet content and restructure the gaming industry. He also expressed hope that the reforms are mostly complete and Tencent can return to quality growth.

But in last week’s internal briefings, Ma delved into nearly every aspect of his $400 billion internet empire.

He scolded the bread-and-butter gaming division for wasting money acquiring users for hastily churned out titles instead of focusing on quality. Ma accused staff of “superficial” reforms in spending and costs, according to attendees. Attendees said he even went so far as to say that corruption ran rampant throughout the ranks, without elaborating. Even the relatively nascent cloud arm was accused of a wasteful market-share grab against Alibaba and Huawei Technologies Co., though Ma quickly corrected that.

But he reserved his harsh comments for Tencent’s legacy social network and content empire, which is losing ground to mobile-native rivals such as ByteDance Ltd. Chinese owner of TikTok, Ma was quoted as saying that Tencent’s years-old news service is now finally in trouble after cutting some jobs, but it could very well be scrapped if results don’t improve.

“Can that business get cut? I told the team — possibly,” Ma told the staff, according to attendees.

Ma said the silver lining appears to be WeChat’s short-video feed. Tencent is focused on developing that TikTok-style feature, yet has yet to fully monetize content with e-commerce and advertising offerings. Executives have said advertising revenue generated by the new service should exceed 1 billion yuan ($143 million) in the fourth quarter.

But China’s biggest social media giant must continue to aggressively cut costs in 2023 — or managers will do it for them, Ma told the meeting.

According to attendees, “I think it should become a habit,” he stressed.

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