Chinese e-commerce major Alibaba Group Holding has laid off about 10,000 employees in three months, to cut expenses amid sluggish sales and a slowing economy in the country, according to media reports. The layoffs come after Alibaba reported a 50 per cent drop in net income in June 2022.
The e-commerce firm let go of over 9,241 employees during the June 2022 quarter and reduced its total headcount to about 2,45,700. The company reported a 50 per cent drop in the net income to 22.74 billion yuan ($3.4 billion) in the June quarter, down from 45.14 billion yuan in the same period last year.
Alibaba, which was founded in 1999, went through a major reshuffle when Ma passed the baton as CEO to Daniel Zhang in 2015 and further appointed him as chairman in 2019. Alibaba in July announced plans to apply for a primary listing in Hong Kong opening up the firm to a vast pool of mainland China investors for the first time, the reports said.
SoftBank Group Corp on Wednesday said it would book a gain of $34.1 billion by cutting its stake in Alibaba Group Holding, as the investment behemoth looks to shore up its cash reserve to weather the market downturn.
In India also, start-ups have been laying off employees to cut costs amid financial stress. Recently, urban mobility firm Ola was also reported to be in the process of laying off about 1,000 employees. Edtech unicorn start-up Byju’s also laid off over 600 employees, including both permanent and contractual.
Before Byju’s, new-generation enterprises including Vedantu, Unacademy and Cars24 have also let go of over 5,000 employees in India this year. Ola has laid off about 2,100 employees during January-March this year, followed by Unacademy (over 600), Cars24 (600) and Vedantu (400). This apart, e-commerce firm Meesho has laid off 150 employees, furniture rental start-up Furlenco 200, influencer-led social commerce start-up Trell 300 employees and OkCredit has let go of 40 employees.
Canadian e-commerce firm Shopify also recently announced a reduction of 10 per cent of its employees, as it faces slowing growth due to a reduction in online shopping after a robust demand in the sector amid the pandemic. The company has also said it plans to lay off 1,000 employees as it failed to predict the scenario of slowing business post-COVID-19.
In its 51-page note recently, leading venture capital firm Sequoia Capital told founders of its portfolio companies that the era of being rewarded for hypergrowth at any costs is quickly coming to an end with investors shifting towards companies who can demonstrate current profitability. “Capital is becoming more expensive while the macro is becoming less certain, leading to investors de-prioritising and paying up less for growth.”
(With Inputs From Agencies)