In one of its most significant overhauls to date, Chinese tech firm Alibaba on Tuesday announced that it will be splitting into six business groups. Under the new arrangement, each of the six newly established businesses will be under the management of its own CEO and board of directors. The company said that the move aimed to “unlock shareholder value and foster market competitiveness”. Alibaba chairman and CEO, Daniel Zhang, in a statement that the restructuring would enable each of these businesses to pursue their own fundraising and public listing plans.
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Referring to the plan as a “transformation”, Zhang said that it would make Alibaba “more agile, enhance decision-making, and enable faster responses to market changes”.
Zhang will continue to serve as Alibaba CEO, however, the day-to-day operations of the six individual business units will be ceded to their respective new management bodies.
As per AFP, one key exception to this restructuring is Taobao Tmall Commerce Group, which operates one of China’s top online purchasing platforms.
Taobao will continue to be under Alibaba’s control and will be wholly owned by the group.
Alibaba stated that the modifications would not have an influence on its stocks, which are currently listed in New York and Hong Kong. The company is aiming for a more “nimble structure”, which means that it will be reducing the size of its middle and back office functions.
The firm’s decision to restructure comes as China promised to support its private sector. In recent years, the company faced unprecedented headwinds as Beijing imposed tighter restrictions on the domestic tech industry.
(With inputs from agencies)
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