Alibaba Group Holding is winding down its metaverse business, according to a source familiar with the matter, making it the latest Big Tech company to pull resources from the once hot sector.
Dozens of employees at Yuanjing, the counterpart of e-commerce giant Alibaba, have been laid off as part of a restructuring aimed at optimizing and improving efficiency in the organization, the source said.
Alibaba, which owns the South China Morning Post, did not immediately respond to a request for comment on Friday.
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Chinese companies often refer to job cuts as “business optimization” to avoid attracting unwanted attention from the public.
The layoffs, first reported by Chinese media on Friday, affected Yuanjing’s operations in both Shanghai and Hangzhou, the capital of eastern Zhejiang province. Yuanjing, which had received “billions of yuan” in investments, previously employed a few hundred workers, according to a report by online news outlet AI Jingxuanshe.
However, the source said the Alibaba unit will continue to exist, with a focus on metaverse applications and tools, and on providing metaverse-based services to customers.
Yuanjing was founded by Alibaba in 2021 amid the intense hype surrounding the concept of the metaverse. That year, a number of major Chinese companies – including Alibaba, Tencent Holdings, ByteDance, Kuaishou Technology and automaker Li Auto – attempted to register their reverse-themed trademarks with the National Intellectual Property Administration, as they rushed to explore the possibilities in a virtual world to explore. aka the next iteration of the internet.
Alibaba’s move to downsize its metaverse workforce mirrors how other major tech companies are cutting back on their investments in the much-hyped sector while devoting more resources to artificial intelligence (AI).
In October last year, it was reported that Facebook parent company Meta Platforms would lay off employees at Facebook Agile Silicon Team, a unit of the Metaverse-based Reality Labs division that focuses on making custom semiconductors, according to a Reuters report at the time , citing two sources. .
Baidu CEO Ma Jie, who led the company’s metaverse business, left the company in May last year as the Chinese internet search giant started paying more attention to AI, just months after US start-up OpenAI introduced ChatGPT to the world introduced.
