Logo of Tencent Photo: VCG

Chinese tech giant Tencent has dismissed online rumors that it plans to reduce 50 percent of its workforce, saying the claims stemmed from a misinterpretation of management remarks about "reorganizing resources to accelerate artificial intelligence (AI) transformation," a source familiar with the matter told the Global Times on Thursday. 

The clarification came after claims that Tencent planned to lay off half of all its employees, including media reports suggesting as many as 8,000 job cuts, circulated widely on Chinese social media following an internal event marking the company's 28th anniversary on Wednesday. 

The rumors sparked heated discussion, with a surge in traffic reportedly causing temporary access problems in Tencent's employee discussion group on the networking platform Maimai. 

During the company's Linktime livestreaming session on Wednesday, Tencent executives outlined plans to accelerate organizational changes to adapt to the AI era, according to the source familiar with the matter.

Management used a military analogy to illustrate the strategy, saying 50 percent of employees should operate like an army defending existing territory, improving efficiency and strengthening core businesses, while the other half should act like a navy embracing new opportunities, exploring AI-native businesses and expanding into new areas of growth.

The remarks were intended to describe a reallocation of company resources rather than a plan to halve its workforce, the source said. 

Tencent's public relations director Zhang Jun also addressed the rumors on social media on Thursday.

The latest organizational push differs from Tencent's earlier cost-cutting and efficiency initiatives, management said. While previous adjustments were more reactive and focused on reducing costs, the current effort aims to improve efficiency, encourage frontline employees to pursue new opportunities and make middle management flatter and more agile.

The clarification comes as Tencent steps up investment in AI infrastructure and applications. 

According to its second-quarter financial results released in August, the company's revenue rose 11 percent year-on-year to 204.79 billion yuan ($30.7 billion), while research and development spending surged 35 percent to 27.28 billion yuan and capital expenditure jumped 176 percent to 52.78 billion yuan. 

Global Times