Advertisement
Alibaba shed nearly 10,000 employees in June quarter as the e-commerce giant cuts costs amid sluggish sales, slowing economy
- A total of 9,241 employees left Alibaba during the June quarter, trimming the company’s overall personnel to 245,700
- The reduced payroll reflects Alibaba’s renewed efforts to cut expenses and drive up efficiency, as the company faces a slowing economy in China
Reading Time:2 minutes
Why you can trust SCMP
Alibaba Group Holding let go of nearly 10,000 employees in the three months ended June 30, when the e-commerce giant struggled with stagnating sales amid weak consumer spending and economic headwinds in China.
Advertisement
A total of 9,241 employees left Hangzhou-based Alibaba during that quarter to trim the company’s overall personnel to 245,700, down from 254,941 at the end of March and 254,702 as of June 30 last year. That put the total decrease in employee numbers for Alibaba, owner of the South China Morning Post, to 13,616 over the six months to June, marking the firm’s first drop in payroll size since March 2016.
The reduced payroll reflects Alibaba’s renewed efforts to cut expenses and drive up efficiency, as it faces continued regulatory pressure, sluggish consumption and a slowing economy in China, the world’s biggest e-commerce market.
By contrast, Alibaba a year ago was pushing to expand its headcount, as the firm doubled down on operations like Freshippo – the group’s proprietary retail chain for groceries and fresh goods. From September to December 2020, the firm’s employee numbers more than doubled to 252,084, from 122,399, driven by its acquisition of hypermarket operator Sun Art Retail Group. Freshippo sales also posted double-digit growth for the first time that quarter.
Cutting some headcount and noncore activities could help Alibaba sharpen its focus on its core businesses and strengthen its profit margins, according to Cheng Yu, a researcher at the Beijing Kandong Research Institute.
Advertisement
“Alibaba has many businesses which are difficult to make a profit on and do not serve its core businesses,” Cheng said. “It is essential to eliminate such businesses so that the company can reduce cost and increase efficiency.”
Advertisement