Mass Layoffs and Plummeting Profits, E-commerce Giant Goes All In on AI Business

Mass layoffs have struck the major Chinese e-commerce company Alibaba. The number of Alibaba employees shrank by around 34% throughout 2025. This occurred as Alibaba offloaded several of its offline retail businesses while ramping up investments in artificial intelligence (AI), citing CNBC.com, Friday (20/3/2026). Alibaba ended December with 128,197 employees, down from 194,320 the previous year, according to the financial report released on Thursday (19/3/2026). That report showed the company’s profits plunging 67% and its revenues missing expectations. The company’s shares on the Hong Kong stock exchange also fell 6% during Friday’s trading (20/3/2026). Most of Alibaba’s employee reductions happened in the first quarter of 2025 following the sale of the Sun Art retail group at the end of 2024. The tech giant also divested its ownership in the Intime department store chain around the same period. Alibaba joins a number of other major technology companies that have cut staff numbers over the past year, from Silicon Valley to Hangzhou, China. Alibaba has been gradually reducing its headcount in recent years, though the latest cuts are far larger than the 11% reduction in December 2024 from the prior year. This is happening as Alibaba seeks to offload labour-intensive holdings and restructure its core business, with a primary focus on artificial intelligence. The Chinese tech giant aims to become a full-fledged AI company encompassing semiconductor manufacturing to computing and AI models. This week, the company launched an AI agent-based service known as Wukong for businesses and raised prices for its cloud and storage services by up to 34% due to rising demand and supply chain costs. Alibaba CEO Eddie Wu stated during the earnings conference on Thursday that the company aims to boost its cloud and AI revenues to more than US$100 billion per year over the next five years.