Alibaba (BABA) Slashes One-Third of Staff as Earnings Plunge in 2025

Key Highlights

• Employee count declined from 194,320 to 128,197—a 34% reduction in one year
• Fourth-quarter profit plummeted 67%; revenue fell short of analyst forecasts
• Shares traded in Hong Kong declined 6% Friday after earnings release
• Major job reductions tied to divestiture of Sun Art and Intime retail operations
• Company unveiled Wukong AI platform and increased cloud service pricing by up to 34%

Alibaba delivered a sobering financial performance on Thursday that sent shockwaves through investor circles. The Chinese e-commerce giant reported a 67% collapse in quarterly profit, revenue figures that disappointed Wall Street, and disclosed a stunning one-third reduction in its global workforce throughout 2025. Market reaction was swift—shares listed in Hong Kong plummeted 6% when trading commenced Friday.

Alibaba Group Holding Limited, BABA

The company’s employee roster now totals 128,197 workers, representing a dramatic decline from the 194,320 positions maintained just twelve months prior. This translates to more than 66,000 job eliminations within a single year.

The primary catalyst behind these workforce reductions stems from Alibaba’s strategic withdrawal from traditional retail operations. The technology conglomerate divested its ownership position in Sun Art Retail Group as 2024 concluded and simultaneously exited its involvement with the Intime department store network. These transactions eliminated substantial numbers of personnel connected to physical storefront operations.

This represents an acceleration of an existing trend. By December 2024, Alibaba had already reduced headcount by 11% compared to the previous year. However, that earlier contraction appears relatively minor when measured against the subsequent magnitude of workforce reductions.

Financial Results Disappoint Markets

The workforce data emerged alongside equally troubling financial metrics. Earnings collapsed by 67% during the October through December period, while top-line revenue missed consensus estimates from market analysts. This dual disappointment triggered Friday’s sharp stock decline in Hong Kong trading.

These results underscore a company navigating through fundamental transformation—divesting legacy business segments while attempting to construct a streamlined operation centered on technological capabilities.

Alibaba maintains its position as China’s second-most-valuable technology enterprise by market capitalization, yet operates within challenging conditions. Revenue expansion across several core business divisions has decelerated, while competitive pressures in Chinese digital commerce and cloud computing remain fierce.

Artificial Intelligence Becomes Strategic Priority

Despite the concerning earnings data and employment cuts dominating media coverage, Alibaba simultaneously advanced its artificial intelligence initiatives throughout the week.

The organization introduced Wukong, an agentic AI platform designed specifically for corporate clients. Concurrently, the company implemented price increases spanning 34% across its cloud computing and data storage offerings, attributing the adjustments to heightened demand and escalating supply chain expenses.

CEO Eddie Wu informed analysts during Thursday’s earnings conference that Alibaba targets expanding its combined cloud and AI revenue streams beyond $100 billion annually within the coming five-year period.

The enterprise envisions constructing what leadership characterizes as a comprehensive AI ecosystem—encompassing semiconductor design through computing infrastructure to AI model development. This represents an aggressive objective requiring competition against both Chinese competitors and international cloud service providers.

Implementing a 34% cloud pricing increase coincident with announcing expanded AI ambitions represents calculated strategic positioning. The action demonstrates Alibaba prioritizes profitability and investment capability over customer acquisition in the immediate term.

This week’s developments—disappointing financial results, substantial workforce reductions, a fresh AI product launch, and aggressive cloud pricing—collectively illustrate an organization executing difficult strategic decisions while transitioning toward a transformed growth strategy.

The stock traded down 0.38% in subsequent sessions following Friday’s more pronounced 6% selloff.

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