Tencent Billionaire Unleashes Rant as Cracks Emerge in Business Empire

Many multinational CEOs like to close out the year with a message of congratulations. However, Tencent Holdings Ltd.’s billionaire co-founder Pony Ma delivered a no-holds-barred rant about slacking, oblivious and even corrupt employees. Ma’s message was a stark contrast to the usual feel-good messages from CEOs, and it highlights the challenges that many companies face when it comes to employee productivity.

Ma's rare show of frustration marked a turning point for the usually mild-mannered mogul. Last week, Ma convened a town-hall meeting to deliver a blistering attack against the way staff managed businesses from social media and content to gaming. The message was clear: with the survival of some businesses in doubt, they all needed to get their act together. According to people who attended the 10-minute lecture, Ma's tirade was a wake-up call for the entire company.

"You can't even survive as a business, yet you're chilling on the weekends, playing ball," Ma told his audience, according to the people present. His remarks were first reported by local media outlet Jiemian. Tencent representatives didn't immediately respond to a request for comment.

Tencent, which helped establish the modern Chinese internet industry along with Alibaba Group Holding Ltd., has seen its growth evaporate over the past year in the wake of a sweeping crackdown on private enterprise. The company's gaming business came under attack from regulations designed to curb youth addiction, while an economic slowdown coupled with punishing Covid restrictions eroded its advertising segment. It cut jobs by the thousands this year, shrinking its workforce for the first time in almost a decade.

Ma and his team have remained positive in public, praising efforts to clean up internet content and restructure the gaming industry. They also hope that the reforms will be completed soon, and that Tencent can return to quality growth.

In a recent internal address, Ma critiqued virtually every facet of his $400 billion internet empire.

He criticized the bread-and-butter gaming division for wasting money on acquiring users for hastily churned-out titles, rather than focusing on quality. Ma accused employees of "superficial" reforms to spending and costs, according to attendees. He even said corruption remained rampant across the ranks, without elaborating, the attendees added. Even the relatively nascent cloud arm was accused of a wasteful market-share grab against Alibaba and Huawei Technologies Co., though Ma acknowledged it corrected course quickly.

But he had some harsh words for Tencent's aging social network and content empire, which is losing ground to mobile-native rivals like ByteDance Ltd., the Chinese owner of TikTok. Tencent's news service has been in the black for a while now, but Ma was quoted as saying that it could very well be cut if results don't improve.

Ma told employees that it was possible that the business could be cut, according to the people present.

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

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

He emphasized that this should become a habit, according to attendees.

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