Alibaba Group is cutting a number of staff from its in-house strategic investment team in response to Beijing’s strict regulatory crackdown, according to Reuters.
The news agency reports that Alibaba plans to reduce its deals team of more than 110 people, mostly based in mainland China, to around 70.
The mass redundancy – which sees the department being cut by more than a third – comes after a recent regulatory crackdown dramatically slowed the pace at which the Chinese e-commerce giant was able to make deals.
Over the six-year period from 2015 to 2021, Alibaba made around 44 investments every year, peaking in 2018 with 70 deals totalling $54 billion. In 2022 so far Alibaba has made just nine investments, worth $5.2 billion.
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The job cuts mainly involve mid-level and senior people based on the Chinese mainland, although Alibaba’s deals team also has staff in Hong Kong.
Sources also revealed that Alibaba has already informed most of the employees of their impending redundancy.
The company started laying off employees from other business units earlier in the year and could potentially axe more than 15% of its total workforce, or about 39,000 staff, Reuters reported.
China’s regulatory crackdown came about in late 2020, when regulators began a campaign to rein in the country’s technology giants, following years of a ‘laissez-faire approach that drove growth and dealmaking at breakneck speed’.
The country has changed its approach in recent months in a bid to boost its faltering post-Covid economy.
The crackdown, coupled with strict ongoing Covid restrictions and a slowing economy, has stifled growth across the tech industry, with businesses including Alibaba and its main rival Tencent planning to cut tens of thousands of jobs this year alone.
TikTok owner ByteDance also shrunk its investment team in January after struggling to operate within the same restricted market.
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