Alibaba Group Holding Ltd., largest e-commerce company in China, reportedly let go 10,000 employees in the past three months.
These layoffs follow Alibaba’s June net income announcement, which showed a 50% decline. These represent an effort to reduce costs in the face of falling sales and the national economy. Over 9,241 people were let go by the e-commerce company in the June quarter. The corporation reportedly reduced its total employee count to about 245,700.
From 45.14 billion yuan in the same quarter last year to 22.74 billion yuan (USD 3.4 billion), the corporation recorded a 50% decline in net income.
Alibaba was established in 1999. When Ma picked Daniel Zhang as his successor as CEO in 2015 and later named him Chairman in 2019, the corporation underwent a significant reorganisation.
Media sources stated that earlier in July, Alibaba revealed plans to submit an application for a primary listing in Hong Kong, bringing the company available to a sizable pool of mainland Chinese investors for the first time.
Alibaba launched a secondary offering in Hong Kong in November 2019 after going public in New York, US, in September 2014. Alibaba would become the first significant business to have main listings in both Hong Kong and New York as a result of the change.
This followed Beijing’s crackdown on Ant Group, which led to the group’s USD 37 billion initial public offering being suspended (IPO). Jack Ma, the CEO of Ant Group, has likewise avoided the spotlight since since he lambasted China’s regulators and state-owned banks in a speech in October.
The dual listing now serves as a strong reminder that no person or organisation in China is more significant than the Communist party. With Alibaba’s announcement of a primary listing in Hong Kong, the business will continue to maintain its listing in the US.
The Hong Kong Stock Exchange (HKEX) announced in January that it would permit “innovative” Chinese companies to conduct dual primary listings in the city if they had weighted voting rights or variable interest entities (where a company creates an offshore entity that enables foreign investors to buy into the stock).
Daniel Zhang, CEO of Alibaba, stated that the business was looking for a different primary listing venue to encourage a “wider and more diversified investor base.”
Alibaba was once a favourite of investors in technology stocks, but the e-commerce giant’s stock price fell when Beijing began a broad crackdown on the private sector, which landed the business with a USD 2.8 billion fine and derailed Ant’s initial public offering (IPO).
Alibaba’s stock increased 4% at the opening of Hong Kong trading on hopes that the move would make it simpler for mainland Chinese investors to purchase its shares.