Alibaba Group Holding cloud division, which provides online computing and storage services, is downsizing its workforce. The latest wave of layoffs will affect approximately 7 per cent of its workforce working under the cloud unit. The move comes as the company streamlines its operations in preparation for an Initial Public Offering (IPO).
According to a report by Reuters, as part of the downsizing process, the cloud unit has started offering severance packages to affected employees.
Recently, the Chinese tech giant disclosed its plans to list and raise funds for four of its business units, including its logistics division called Cainiao. In line with these plans, China's largest cloud service by Alibaba is scheduled to go public next year.
This development is a result of Alibaba's earlier announcement this year regarding its restructuring strategy. The company intends to divide itself into six distinct units, following a regulatory crackdown on China's technology sector that lasted for two years.
In the recent quarter, Alibaba's cloud division reported a revenue of 18.6 billion yuan ($2.69 billion). However, this figure represents a 2 per cent decline compared to the same period last year.
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Tech Layoffs
Tech companies started laying off employees late last year and have carried forward most of the workforce reduction in 2023. Big US-based tech companies like Google, Amazon, Meta and Twitter have also conducted layoffs. Amazon and Meta have conducted multiple rounds of job cuts leading to layoffs of 27,000 and 21,000 employees, respectively. Google also laid off 12,000 employees in the month of January from across its product range.
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