Tencent Reshuffles Cloud Services Arm After Poor Pandemic Performance
Tencent Holdings Ltd. (00700.HK) reshuffled its cloud services and industrial internet arm after senior executives were left unsatisfied with its performance last year, according to people familiar with the matter.
The Hong Kong-listed company’s Cloud & Smart Industries Group (CSIG) said Friday that Tang Daosheng had left his role as its president to become its CEO.
Additionally, Qiu Yuepeng, the president of CSIG subsidiary Tencent Cloud, has taken on the extra role of the group’s chief operating officer, reporting directly to Tang on sales, quality and operational matters, CSIG said.
Tencent bigwigs discussed the reshuffle after Tencent Cloud missed growth expectations in 2020, when the Covid-19 pandemic forced many companies to conduct more business online, two people close to the company told Caixin.
The unit’s rivals have prospered during the pandemic, with Huawei Cloud overhauling it in the fourth quarter last year to become China’s second-largest such service behind Alibaba Cloud, according to market research firm IDC.
Huawei Cloud’s surge is particularly galling for Tencent given that the controversial telecoms giant only entered the public cloud services sector in 2017, four years after Tencent.
Tencent’s financial reports have repeatedly stressed that the coronavirus outbreaks caused delays to its cloud projects, complicated new project signings and forced it to make one-off adjustments to infrastructure-as-a-service contracts.
Tencent Cloud said the switch-up marked another significant change since the CSIG was established in 2018 amid a broader company-wide restructuring.
The pandemic had sped up the arrival of the “age of full digitization” and made Tencent “even more steadfast in its strategic direction for the industrial internet,” Tang said.
The personnel changes aimed to deepen the company’s presence in the industry and improve efficiency, he added.
Tencent is expected to announce its quarterly earnings on Monday.
Contact reporter Matthew Walsh (firstname.lastname@example.org) and editor Lu Zhenhua (email@example.com)
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