Alibaba’s workforce significantly decreased by about 34% in 2025 as the company sold off some of its physical retail businesses and committed more resources to artificial intelligence (AI). The Chinese e-commerce and tech giant reported 128,197 employees by the end of December, a sharp drop from 194,320 a year prior.
This substantial headcount reduction came to light in an earnings report released on Thursday. The report also showed a significant 67% plunge in the firm’s profit and revenue that fell short of expectations for the last three months of last year. Following these announcements, Alibaba’s shares in Hong Kong traded down 6% on Friday.
Most of Alibaba’s workforce reduction happened in the March 2025 quarter. This followed the sale of its Sun Art retail group at the end of 2024. Around the same time, the tech giant also divested its stake in the department store chain Intime. These sales represent a clear move away from labor-intensive retail operations.
Alibaba, China’s second-largest tech company by market capitalization, joins many other major tech firms, from Silicon Valley to Hangzhou, China, that have cut staff over the past year. While Alibaba has steadily reduced its headcount in recent years, the latest cuts are much larger than the 11% reduction seen in December 2024 from the previous year.
The company’s staff has historically supported its vast network of business units, which include e-commerce, cloud services, logistics, and other related ventures. However, Alibaba is actively restructuring its core businesses and offloading holdings that require significant labor.
This strategic shift aligns with Alibaba’s strong focus on artificial intelligence. The tech giant aims to become a “full-stack AI company,” meaning it wants to cover everything from semiconductor manufacturing to computing and developing AI models.
Just this week, Alibaba launched Wukong, an agentic AI service designed for businesses. The company also increased prices for its cloud and storage services by up to 34%, citing rising demand and supply chain costs. During an earnings call on Thursday, Alibaba CEO Eddie Wu stated the company’s goal to grow its cloud and AI revenue to over $100 billion annually within the next five years, underscoring its ambitious AI vision.
