Tencent Holdings has recorded its first-ever revenue decline.
Tencent’s online advertising sales fell by a record as China’s worsening economy continues to hurt its biggest corporations.
Tecent, china’s most valuable company, slashed 5,000 jobs or nearly 5% of its workforce. That is the first quarterly drop in staffing since 2014.
Revenue fell a deeper-than-projected 3% to 134 billion yuan ($19.8 billion) while net income also missed estimates, plunging 56% in the June quarter.
Prosus NV, one of Tencent’s biggest backers, slid more than 1% in Europe.
Yet, there are some positive indicators.
Online advertising revenue slid a record 18% in the quarter, but that was better than analysts feared.
Adjusted net income of 28.1 billion yuan was about 15% above expectations.
Given the new realities, Tencent executives have said that international games, cloud software and WeChat video will be their major strategic priorities.