Alibaba layoffs in the second quarter of 2022 reached nearly 10,000. The reduced number of employees will allow the tech giant to achieve better financial results at this challenging time. The slowing economic growth of China’s economic partners may further weaken China’s economy.
During the April-June period, Alibaba Group Holding fired 9,241 employees, which means the number of staff has decreased to around 245,700. Moreover, this is not the first-time mass layoff. In the first quarter of 2022, over 4,300 employees were fired. Over the six months, more than 13,600 people lost their jobs at Alibaba. It is the first such situation since March 2016.
Why has Alibaba laid off so many employees? The conglomerate has recently struggled with stagnant sales and lowered consumption in China. Alibaba reported a 50% net income drop in the second quarter.
By the end of the year, the chair and CEO of Alibaba plan to employ nearly 6,000 college graduates to join the company with headquarters in Hangzhou.
Alibaba is not the only tech giant that had to lay off employees this year. Back in March, it was reported that Tencent plans to reduce the staff size by 20%. In July, other big tech companies like Twitter, TikTok, Shopify, Netflix and Coinbase fired 32,000 employees in total. Microsoft also laid off 1% of its employees.
Slowing economy in China
Even though China’s exports grew rapidly in July, it is not enough to boost the country’s economy, which has been weakened, for example, by pandemic restrictions and the zero-COVID approach. The lockdown in Shanghai, home to the world’s busiest port, disrupted supply chains and foreign trade. According to economists, it may take months to return to “normal.”
China’s economy in the second quarter grew only 0.4% year-on-year. The slowed economic growth of the United States and Europe may reduce the demand for Chinese products. There were stimulus measures introduced in China, although the projected 5.5% growth seems difficult to achieve.