Chinese Internet company Tencent recently completed its staff layout in its North American office, and about 20 employees were dismissed during this adjustment, accounting for 40% of its total employees in North America.

According to reports in Chinese local media, this layoff reportedly focused on the product department, which is the game studio of Tencent North America. At present, Tencent North America only maintains a local business development team.

Over the past few years, Tencent implemented a series of aggressive acquisitions in North America, which were mainly in the traditional client-based game sector. This marked the direction of the company’s investment and acquisition in North America. Like in the Chinese market, Tencent hoped that these American client-based game studios could bring a large number of quality games and revenue to its platform. However, this strategy did not work. Starting from two years ago, Tencent gradually acquired some social-communication-related start-up companies in Silicon Valley.

Tencent’s investment and acquisition department was reportedly unsatisfied with the acquired North American studio and the game product department over the past few months. In addition, the competition in the client-based game market is severe and the growth of smartphone game market also impacted the traditional client-based game products. Ma Huateng, chairman and chief executive officer of Tencent, also admitted that the costs for game development is too high and Tencent is no longer tending to develop games on their own. The company plans to introduce third-party developers via its mobile QQ and the future WeChat open platforms.

In the future, Tencent’s North American team will not have product development functions; and the entire team will focus on business development.