Alibaba workforce shrinks 34% in 2025 as Chinese tech giant doubles down on AI

Alibaba has undergone a significant reduction in its workforce, with a staggering 34% decrease in 2025, as the tech giant pivots towards artificial intelligence. By the end of December, the company's employee count dropped to 128,197, a notable decline from the 194,320 reported just a year prior. This workforce reduction was disclosed in a recent earnings report, which also revealed a worrying 67% drop in profits and revenue figures that fell short of expectations for the final quarter of the previous year. The company's shares suffered a 6% decline on Friday, reflecting investor concerns. The majority of these layoffs were highlighted in the first quarter of 2025, following Alibaba's sale of the Sun Art retail group at the conclusion of 2024. Additionally, the company divested its interest in the Intime department store chain around this timeframe. As the second-largest tech entity in China by market capitalization, Alibaba is part of a broader trend of major technology firms, from Silicon Valley to Hangzhou, scaling back their workforces over the past year. Alibaba's workforce has traditionally supported its extensive range of business units, including e-commerce, cloud services, logistics, and various related sectors. However, the company has been on a path of reducing its headcount in recent years, with the latest cuts surpassing the 11% reduction seen in December 2024. This shift comes as Alibaba aims to streamline its operations and prioritize artificial intelligence. The company is on a mission to evolve into a comprehensive AI powerhouse, covering everything from semiconductor manufacturing to advanced computing and AI models. Recently, Alibaba introduced a new AI service called Wukong for businesses and has increased prices for its cloud and storage solutions by up to 34% due to growing demand and rising supply chain costs. During an earnings call, Alibaba's CEO Eddie Wu expressed ambition for the company, stating that they intend to elevate their cloud and AI revenue to exceed $100 billion annually within the next five years.