Tencent: Third Restructuring, Third Time Lucky?

Tencent Holdings picked an opportune time to announce a restructuring, its third company-wide reorganization since its founding 20 years ago. The Chinese social media and gaming giant said over the weekend before the week-long National Day holidays that it would reduce the number of business groups by one to six. Note that it was a working day when the change was announced, as it has been a regular practice in China to extend the holiday period (so that the employees have time to travel back to their provinces) by working the prior weekend to compensate. Hence, the staff of Tencent likely had been sufficiently briefed on the rationale and impact before they leave the office. The long break accords employees with ample time to absorb and reflect on the change outside working hours. This shrewdly avoided the productivity hit resulting from uncertainty and doubt if it was work as usual the subsequent days following the announcement.

Tencent, often dubbed China’s Facebook cum Nintendo, retains the Corporate Development Group (which serves as a new business incubator), Interactive Entertainment Group (which is in charge of online gaming, movies, etc), Technology and Engineering Group, and Weixin Group (the division that responsible for the highly popular messaging app, WeChat/Weixin). On the other hand, the Online Media Group, Mobile Internet Group, and Social Networking Group face the ax. Nevertheless, two new groups have been created, namely, the Cloud and Smart Industries Group and the Platform and Content Group.

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