Alibaba has announced a series of workforce reduction leading to approximately 7 per cent job cuts through the company. The employees from its cloud division will be the most affected.
As cited by various media reports, the decision comes as a part of the company’s broader restructuring strategy. It is primarily aimed at preparing the cloud division, which was previously recognised for its swift expansion, for an independent spinoff and eventual initial public offering (IPO). The process is planned to be finalised within a span of one year.
Alongside logistics divisions such as Cainiao, Alibaba Cloud will undertake independent fundraising initiatives and consider potential listings. The company aims to divide itself into six separate units, following a two-year regulatory crackdown on China’s technology industry.
If reports are to be believed, the company has also started notifying its employees about the job cuts and has also started with the process of severance pay for them. The company is also said to be transferring employees to other divisions, however, this is not an option for all the employees.
As of March 2023, Alibaba had a workforce of over 250,000 employees, although the distribution of employees across different departments remains unspecified.
The recent reports in financial publications have sparked speculation about whether Alibaba’s recent job cuts are an effort to align with market forces or a response to political dynamics in China. In 2021, Alibaba Cloud faced regulatory scrutiny from the Chinese Communist Party following its disclosure of a significant software error to the authorities. Additionally, it was involved in China’s largest cybersecurity data breach in 2022, which drew further attention from Beijing’s authoritative gaze.
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