Alibaba Group Holding Ltd, the Chinese tech behemoth, is restructuring its cloud operations in anticipation of an upcoming initial public offering (IPO).
As part of its preparations for the IPO, the company has commenced a round of downsizing, impacting approximately 7 percent of its workforce, as per a Reuters report.
This development comes as Alibaba adapts to regulatory changes in China and aims to position its cloud service as a leader in the dynamic market.
Alibaba’s cloud division, a key player in China’s cloud service landscape, plans to offer severance packages to affected employees, the report added.
Last week, the China-based tech giant had said that it intends to separate its cloud computing segment and make it an independent publicly traded company in the next 12 months.
Layoffs Today, IPO Tomorrow
While Alibaba did not provide an immediate response to requests for comment, the downsizing measures indicate the company’s strategy to reshape its structure and ensure a more efficient and agile business model fit for an IPO listing.
With China’s largest cloud service slated for listing next year, Alibaba is keen on fortifying its position in the market and capitalizing on the evolving dynamics of the tech industry.
In the recent quarter, Alibaba’s cloud division reported revenue of 18.6 billion yuan ($2.69 billion), showing a 2 percent decline compared to the previous year. The company’s focus on optimising its cloud operations aims to drive future growth and enhance profitability.
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