According to ChainCatcher, Ma Huateng told Tencent employees at an internal meeting marking the company’s 28th anniversary that its transformation was already late and organizational change must accelerate. He said traditional businesses such as gaming and social media must be maintained, while AI should improve efficiency so that half the workforce can handle work previously done by more people and the other half can explore AI-native businesses and new growth opportunities.

Ma cited Google as an example of the pressure from AI. Google’s search advertising revenue grew 12% in the third quarter this year, down from 19% in the first quarter and 17% in the second; its management has said AI Mode has weaker monetization. Tencent launched Yuanbao Search on its anniversary, using a large language model to redesign search and incorporating content from WeChat Official Accounts and Channels.

Ma also called for flatter management and urged employees to adapt to new roles and skills. He said the changes differ from earlier cost-cutting efforts and are intended to help teams work faster with existing staff. After rumors circulated that Tencent would cut 50% of its workforce or lay off 8,000 employees, Tencent public relations director Zhang Jun said the 50% figure was a metaphor for organizational transformation. Tencent had not announced layoffs of half its employees.