StockTalk (5.24): Alibaba's 7% workforce cut? What's really going on?
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StockTalk (5.24): Alibaba's 7% workforce cut? What's really going on?
As reported, Alibaba Group's $Alibaba(BABA.US$ cloud division will start a new round of layoffs, with a layoff ratio of about 7%. However, industry insiders hinted that this may also be related to the company's recent restructuring. Earlier this year, Alibaba CEO Daniel Zhang announced the reorganization called "1+6+N", and Cloud Division is one of the parts after the spin-off. The move comes as Alibaba pivots to become a holding company rather than just an e-commerce platform.
Alibaba layoffs though impacting about 7% of employees, would leave many without jobs. As per the report, the company has also reportedly started informing and contacting employees about the mass layoffs. Alibaba layoffs are, however, leading to a scenario where the company is giving people the option of accepting severance packages or transferring to other divisions. But even though the latter is only being offered to a few. Still, Alibaba remains one of the hottest stocks in China.
While official confirmation of the layoffs is still in the works, the news has already caught the attention of many in the investment community. What impact will mass layoffs have on the company? How does Alibaba Cloud's reorganization proceed? What does this mean for Alibaba's future? Some say only time will tell, but others are already speculating on the potential impact on the Chinese tech community.
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moomooZeski : If you had a choice filled with certain obscenities, I'd probably select that if laid off.... UNLESS there was a FAT (PHAT) severance package?!
ZnWC : It has become a trend to layoff once a company is facing revenue dropped. From the business prospective, this is inevitable during recession where demand is dropping.
Definitely one would feel disappointed at first. But if the retrenchment package is attractive, layoff may be blessing in disguise. Take a break and be hopeful. Continue to upgrade oneself to look for another job or even start your own business.
71519856 : Nothing new on todays economy and implementation of AI as soon as possible
EYSY : As an investor, if the company is not doing well, reducing expenses is necessary for the future sustainability of the company. If there's a change in direction in the company, it makes even more sense not to have excessive workforce that does nothing in the company.
As an employee, I would feel disappointed to be laid off especially if I have worked for many years with the company. Hope they'll get a good severance package and find a better opportunity elsewhere. When one door closes, another door opens!
To avoid massive layoff from happening, it's important for the company to be more thoughtful when hiring and expanding its workforce.
cola1010 : These layoffs are thought to be related to Alibaba's current restructuring efforts, which aim to turn the company into a holding company with a diverse business portfolio. The impact of layoffs is determined by a variety of factors, and while they may result in short-term cost savings, they may also result in a loss of expertise and morale.
Despite this evolution, Alibaba continues to be a major participant in the Chinese market and is highly valued by investors. Its reinvention signals a desire to diversify revenue streams and expand outside e-commerce, but success is dependent on negotiating market dynamics and regulatory changes.
GodSpeed289 : It was reported that Alibaba Group into separate businesses is primarily driven by the need to respond to competition rather than regulation. It is apparent that Alibaba recognized its diminished agility and inability to keep pace with smaller players in terms of market competition and defending its market share. As a result, the company opted for a restructuring approach to address these challenges.
momo98 : Layoff is an opportunity to leverage and apply for a new opportunity. If not, you have some time to take a break and consider your next options properly
tidy Mink_5653 : As an investor, it is a positive sign to improve company EPS through cost cutting, also improve operation efficiencies as expected from the direction to spin off 1+6+N synergy.