Alibaba to Start Massive Layoffs, Sources Say

Heated discussions regarding reports of mass layoffs at Chinese tech giants Alibaba and Tencent appeared Monday on domestic Twitter-like social media platform Weibo. Local news outlet Yilanshangye learned from several sources that Alibaba‘s MMC business unit is planning to sever ties with many employees, while the proportion of layoffs in this round will stand at roughly 20%. At present, several business lines within the company have finalized their initial layoff list.

According to public information, Alibaba‘s MMC business unit was launched in March 2021, focusing on community group buying and integrating Alibaba LST, a data-backed retail management system, and Hema Market, an offline retail store chain. According to relevant media reports, as of mid-April, 2021, the MMC business unit has publicly released nearly 1,500 job positions. Moreover, according to an industry website, the company will invest at least 20 billion yuan ($3.15 billion) in its community group buying business in 2021.

Alibaba‘s MMC business unit has achieved rapid development. Data show that in April 2021, the daily order volume of Hema Market was about 2 million. In June, the order volume rose to about 6 million. Moreover, in late June, a target set by the business unit in 2021 was to enter more than 20 Chinese provinces, with an average daily order number of 40 million and an average daily GMV of 350 million yuan.

However, the firm’s MMC business unit has been going through adjustments. In June, 2021, Zou Zhijun, the former channel leader of the MMC business unit, was transferred, and his position was replaced by Li Bo, the former chief financial officer of B2B business group operations. At the same time, Wang Tingxiang, who was in charge of operations for the MMC business unit, also assumed the role of head of business analysis – similar to the department of Meituan. In addition, in September, the MMC division announced that it would integrate “Hema Market” and “Taobao Grocery” and upgrade them to a new brand called “Taocaicai,” a community marketplace.

In 2021, major Chinese internet companies began to lay off more employees.

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In September, 2021, Tencent started layoffs within small business departments. In December, leading domestic online video platform iQiyi was exposed to layoffs, with a proportion as high as 20%. At the same time, short video sharing app Kuaishou was reported to be conducting changes to some of its small business lines. In just two months after the Spring Festival of 2022, many internet enterprises, including Weibo, Xiaomi, Didi, Zhihu and Pinduoduo, successively reported their “optimization” of personnel and the adjustment of business lines.