Chinese e-commerce and cloud giant Alibaba (NYSE:BABA) reduced its workforce by about 20,000 employees during 2023, which the company reported in conjunction with its fiscal third-quarter earnings this morning. Alibaba also noted that it increased how much BABA stock it can buy back by $25 billion.
As of the end of 2023, Alibaba’s workforce consisted of 219,260 individuals. That’s compared to nearly 240,000 employees at the end of 2022. As Bloomberg reports, in 2023, Alibaba “reduced headcount by roughly the same number over the course of 2022 as well.”
The Alibaba layoffs come as the company seeks to unload a number of its non-core businesses.
The Alibaba Layoffs and Recent Results
Alibaba reported earnings per share, excluding certain items, of $2.67 for the period. That figure came in slightly above analysts’ average estimate of $2.64 per share, according to Seeking Alpha. Revenue also rose 5% year-over-year (YOY) to $36.67 billion, surpassing analysts’ mean estimate by $270 million.
With China’s economy sharply slowing in recent quarters, Alibaba’s e-commerce business has been losing market share to competitors tending to offer cheaper products, including PDD Holdings’ (NASDAQ:PDD) Pinduduo.
Also noteworthy is the fact that the top line of Alibaba’s cloud computing unit increased only 3% YOY. Meanwhile, for cloud computing, “EBITA rose 86% year-on-year as Alibaba focuses on profitability.”
CEO Eddie Wu said that the company’s “top priority” is to “reignite the growth of [its] core businesses, e-commerce and cloud computing.” Wu also noted that Alibaba will plough more money into its e-commerce businesses in order to improve customers’ “core experiences.”
As of this writing, BABA stock is down 5% for the day but up about 1% for the past one month. Further, shares are down nearly 30% for the past 12 months.
On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
