China's Tencent Holdings has told staff it will no longer guarantee them a pay raise upon promotion, according to an internal letter seen by Reuters, as it reviews its salary policy amid a wider cost-cutting drive.
The Chinese social media and gaming giant told its employees of the policy change on Tuesday, saying the decision was taken as part of a yearly review in consideration of the "company's operation plan and the external environment."
But it said the company would still conduct an annual salary review to consider an individual's contribution and performance.
Tencent, which declined to comment on Wednesday, told staff in 2020 it would no longer guarantee an annual salary rise.
Its latest policy change reflects the changing circumstances of China's technology giants, once among the fastest growing Chinese firms and sought after employers but now hit hard by a bruising regulatory crackdown and a slowing economy.
Tencent, China's most valuable company, reported quarterly earnings last month showing profit halved from a year earlier and revenues stagnated, its worst performance since it went public in 2004.
Founder and Chief Executive Pony Ma told analysts the company had implemented cost control measures and scaled back non-core businesses in the first quarter. He said it was looking to "achieve a more optimized cost structure going forward."
It has shut its Penguin Esports unit. Reuters reported earlier this year that Tencent and peer Alibaba Group planned to make numerous job cuts.
The latest Tencent salary policy change, first reported by local media on Wednesday, was one of the most discussed topics on the Maimai career portal, China's equivalent of Linkedin.
"Quality candidates will now weigh the stability of a Tencent job," said one user on Maimai, who used a pseudonym and said he was a Tencent employee.
Ma caused a stir on Chinese social media recently after he reposted an article on China's economy, breaking his usual silence on an increasingly sensitive topic.
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