Tencent Holdings says it will distribute most of its stake worth R350 billion in food delivery firm Meituan to its shareholders, which include Naspers-owned Prosus, in the form of a dividend, as it posted a second straight quarterly revenue drop.

Tencent, the world’s largest videogame company and the operator of the WeChat messaging platform, said it will transfer 958.12 million shares in Meituan, representing approximately 90.9% of the class-B ordinary shares it held in Meituan.

Tencent owns 17% of Meituan.

The company has continued to struggle under harsh rules imposed by Beijing on the tech industry and slowing economic conditions.

On Wednesday, Tencent said revenue fell 2% to C¥140-billion (R341-billion) for the three months ended 31 September, from C¥142.3-billion a year earlier.

Analysts on an average expected C¥141.6-billion in revenue, according to Refinitiv.

Up to the previous quarter, Tencent reported double digit growth for almost every three-month reporting period since it went public in 2004, but its expansion has been halted by China’s crackdown on the tech industry that began in late 2020.

The Shenzhen-based giant is shutting some unprofitable businesses and laying off staff in a bid to return to growth.

In the third quarter, the number of Tencent employees fell by 1 875 to 108 836 as of end-September. The second quarter’s number was already down by 5 498, or nearly 5% from the first quarter.

Reuters reported on Tuesday that the company has begun a new round of job cuts targeted at its video streaming, gaming and cloud units. The news wire was not able to establish the scale of the job losses.  — Reuters