Alibaba undertakes a 7% cut in the staff of its business in the cloud

MADRID, 24 May. (EUROPA PRESS) -

The Chinese e-commerce giant Alibaba is carrying out an adjustment in the Alibaba Cloud workforce, which would affect 7% of the workforce of this unit, which is equivalent to around 1,000 employees, according to the newspapers 'Nikkei' and 'South China Morning Post', the latter owned by Alibaba, citing knowledgeable sources.

The downsizing comes after the company announced its intention to spin off the cloud business over the next twelve months, turning the unit into an independent listed company.

According to 'South China Morning Port', the Chinese company has been reducing its workforce in recent months, with a cut of more than 4,500 workers at the end of March compared to December 2022 and of almost 20,000 in a year, up to a total of 235,216 employees in the group, according to the accounts for the first quarter, published a week ago by the multinational.

Cloud services had been a growth area for the company, but the unit has struggled this year, when Alibaba Cloud revenue fell 2% year-on-year in the first quarter.

Alibaba Chairman Daniel Zhang Yong, who took direct control of Alibaba Cloud last December, attributed the revenue decline to "external changes in the marketing environment and customer composition."

At the end of March, Alibaba had announced a profound reorganization of its activity, including its division into six companies, each with flexibility to raise external capital and study the possibility of going public.