The company is scaling back its metaverse ambitions, sources were cited as saying in the report.
Yuanjing was set up by Alibaba in 2021, to avail opportunities in the virtual world, joining peers Tencent, ByteDance, Kuaishou Technology, and Li Auto in registering metaverse trademarks.
The layoffs, first reported by Chinese media on November 1, have affected operations in Shanghai and Hangzhou.
In a similar move in February 2023, the group reduced its workforce by more than 4,000 people. The year before that, Alibaba fired about 19,000 employees as it adapted to a global economic chill and shifted focus to cost efficiency.
It missed market expectations for first quarter revenue in August, as the company’s domestic ecommerce sales came under pressure from cautious spending by Chinese consumers in a faltering economy.
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Alibaba is also facing intense competition from rivals like JD.com and discount-oriented retail platforms, including PDD Holdings’ Pinduoduo and ByteDance-owned Douyin.For the quarter ending June 30, Alibaba reported revenue of 243.24 billion yuan ($33.98 billion), which fell short of the analysts’ average forecast of 249.05 billion yuan, according to LSEG data.
