The cloud computing unit controlled by e-commerce giant Alibaba Group is preparing for an initial public offering in the next 12 months, people familiar with the matter said, according to the South China Morning Post. Alibaba has cut thousands of employees, or 7% of its workforce. Alibaba did not publicly comment on the planned layoffs and did not immediately respond to requests for comment. Alibaba has been shrinking employee pay over the past few months. At the end of March, employees were down 4,524 from December to 235,216, according to its first-quarter report. Alibaba has cut 19,725 full-time employees in the past 12 months, or 7.7% of the company’s total number.
Chinese tech companies rarely publicly announce layoffs, often known as business restructuring. Alibaba did not disclose the salary size of its various business units, including its cloud computing division. People familiar with the decision say Alibaba will pay two additional months for employees who leave within a month, according to the country’s labor law. Cloud services have been a promising growth area for the company, but in the first quarter, Alibaba’s cloud computing revenue fell 2% year on year to 18.6 billion yuan ($2.6 billion), or 9% of the group’s total revenue. In a plan announced this month, Alibaba will spin off its cloud computing division sometime next year by distributing stock dividends to shareholders, making it a separate public company.
Post time: May-25-2023