China’s Alibaba has reportedly cut jobs in its Metaverse division
Chinese e-commerce giant Alibaba has reportedly scaled back its turnaround ambitions amid the rapid growth of AI. According to the South China Morning Post (SCMP), Alibaba is cutting dozens of positions within its inverted division, with sources suggesting the company plans to restructure and improve efficiency. Earlier, Alibaba invested $60 million (approximately Rs. 504 crore) in Nreal, a Chinese AR glasses maker, as part of its metaverse initiatives.
Alibaba’s metaverse unit is called Yuanjing, whatever that was reportedly founded in 2021. According to reports, the latest job cuts at Alibaba’s Yuanjing unit are impacting the teams in Shanghai and Hangzhou.
The exact number of layoffs within Alibaba’s Metaverse unit remains unknown, and the company has not yet released an official statement on the matter.
According to the SCMP report“Billions of yuan” have been pumped into Alibaba’s metaverse unit, which employs a few hundred workers.
The metaverse is a blockchain-powered virtual ecosystem in which users interact as digital avatars. Within these immersive, lifelike digital worlds, people can socialize, work, shop, play games and enjoy entertainment, all from the comfort of their homes.
In recent years, the excitement around the metaverse has fluctuated considerably. Brands like Lamborghini, Samsung and Apple have explored the metaverse as a way to connect with younger audiences.
Since its launch in 2020, Mark Zuckerberg’s Meta has suffered back-to-back losses in its metaverse-focused division, Reality Labs, which only reported further declines in April. Similarly, China’s Baidu has shifted its focus from the metaverse to AI. Last year, following Baidu’s move to generative AI, its head of AI development resigned.
Despite the reported layoffs, Alibaba is expected to retain its Yuanjing unit, which will continue research and development focused on metaverse use cases, the report said.
In June 2023, blockchain company Near Foundation had partnered with China’s Alibaba Group to help developers build its blockchain infrastructure.
