Alibaba recorded a sharp decline in its workforce over 2025, as the company restructured operations and moved away from labour-intensive retail businesses. The company ended December with 1,28,197 employees, down significantly from 1,94,320 a year earlier, marking a reduction of nearly 34 per cent.
A major portion of this decline followed Alibaba’s exit from offline retail ventures, including Sun Art Retail Group and Intime Department Store. These divestments were part of a broader effort to streamline operations and focus on higher-growth, technology-driven segments.
The workforce reduction coincided with a challenging financial performance. The company reported a steep drop in profits for the final quarter of the year, while revenues fell short of market expectations. Its shares also faced downward pressure in Hong Kong trading following the announcement.
Alibaba has been gradually trimming its workforce in recent years, but the latest decline is notably larger than previous reductions. The shift reflects a strategic pivot towards artificial intelligence, cloud computing, and digital infrastructure.
As part of this transformation, the company recently introduced an AI-powered enterprise service called Wukong, aimed at expanding its presence in advanced technology solutions. It has also increased prices for its cloud and storage services, citing rising demand and supply-side pressures.
Under the leadership of Eddie Wu, CEO, Alibaba, the company is positioning itself as a full-stack AI player, with ambitions spanning chips, computing infrastructure, and AI models. The company has set an aggressive target to scale its cloud and AI revenues substantially over the next five years.
The restructuring highlights a broader trend across global technology firms, where organisations are reducing headcount in traditional segments while investing heavily in next-generation technologies such as AI.
