Alibaba Group Holding has reportedly downsized its metaverse unit, Yuanjing, amid a broader strategic shift, cited by the South China Morning Post. On 1 November, Chinese media reported that dozens of employees in Yuanjing’s Shanghai and Hangzhou offices were laid off.
These layoffs have been framed as a ‘business optimisation’ to improve organisational efficiency.
Yuanjing was launched in 2021 amid a surge of interest in the metaverse across China. At that time, companies such as Tencent, ByteDance, and Li Auto registered trademarks and invested in virtual world projects. Although
Yuanjing has downsized, the source stated that it will still focus on creating metaverse applications and services for both consumer and industrial use.
The move aligns with recent trends in the tech industry, where companies are shifting investments from the metaverse to artificial intelligence (AI). This shift mirrors actions by other tech giants, including Meta, which reduced its Reality Labs team last year, and Baidu, whose head of metaverse operations departed in May.
In 2022, Zhejiang province, home to Alibaba’s headquarters, set bold targets for metaverse industry growth. It aims to achieve a valuation exceeding 200 billion yuan by 2025.
As Alibaba adjusts its metaverse strategy, investors and industry watchers are closely following Yuanjing’s future and the broader shift toward AI in the tech sector.
