According to a recent article from the South China Morning post, Douyin and TikTok developer ByteDance has made cuts to its workforce across a number of departments.
Although not severe, it does indicate a move by the company to tighten up certain portions of its business. This includes its gaming efforts. With layoffs reportedly in the hundreds, although this comprises only a small part of ByteDance’s massive overall workforce.
As previously reported by the South China Morning Post, ByteDance had previously made layoffs from its video game division. Although previously seen as a way to diversify revenue, as this was in the tail-end of the Chinese government’s crackdown on the gaming industry, ByteDance seemingly saw it as the weak link to cut. Now, with these layoffs ByteDance seem to be stepping back further from gaming as a portion of their business.
A step backwards?
Given the recent uncertainty around the gaming industry in China, and the resulting step back by companies like ByteDance, this could perhaps be an indication of damaged confidence in the gaming industry as a whole. Chinese regulators are infamous for their opaque and often unpredictable changes to legislation, so for a company like ByteDance the preference is likely to be to stick with what’s been successful, namely their short form video platform TikTok and Douyin.
Given that previously, ByteDance has reported rising costs, it seems inevitable that the company will want to ‘trim the fat’ of underperforming areas. However, it should be noted that actual knowledge of the company’s inner workings is difficult to pin down, as it is a privately owned company. However, given the prominence of ByteDance in China’s tech market, and the connected mobile gaming market, their moves can be seen as indicative of shaky confidence in the aftermath of a tech crackdown and the lifting of zero-covid initiatives by the government.
We reported on the Chinese gaming sector's rocky road through 2022 here.