NetEase Inc. (NTES) saw its shares plummet by 5.06% in intraday trading on Monday, with the stock reacting to news about the company's reorganization efforts aimed at boosting profitability.
According to reports, NetEase's founder and CEO, William Ding, has initiated a restructuring process that involves layoffs, studio closures, and pulling out of international investments. These moves are seen as a strategy to refocus the company on a smaller number of titles and improve profit margins.
The reorganization plans come in the wake of NetEase's revenue growth slowing down to 1.5% in the December 2024 quarter, highlighting the need for the company to streamline its operations and concentrate its resources on the most promising projects.