Chinese e-commerce giant Alibaba Group Holding Ltd. has fired around 10,000 employees in three months, various media reported.
These layoffs come after Alibaba reported a 50 per cent drop in net income in June. These are an effort to cut expenses amid sluggish sales and a slowing economy in the country.
The e-commerce firm let go of over 9,241 employees during the June quarter. According to the reports, the company trimmed its overall headcount to around 245,700.
The company reported a 50 per cent drop in the net income to 22.74 billion yuan (USD 3.4 billion) in the June quarter, down from 45.14 billion yuan in the same period last year.
Alibaba was founded in 1999. The company went through a major reshuffle when Ma passed the baton as CEO to Daniel Zhang in 2015 and further appointed him as Chairman in 2019.
Earlier in July, Alibaba announced plans to apply for a primary listing in Hong Kong opening up the firm to a vast pool of mainland China investors for the first time, media reports said.
Alibaba went public in New York, the US in September 2014 and completed a secondary listing in Hong Kong in November 2019. The move would see Alibaba become the first large company with primary listings in both New York and Hong Kong.
This has come in an aftermath of Beijing’s crackdown on Ant Group which triggered the suspension of the Group’s USD 37 billion Initial Public Offering (IPO). Ant Group’s controller Jack Ma has also not been seen in public since he criticised China’s regulators and its state-owned banks in a speech in October.
Now the dual listing is a stark reminder that in China, no one individual or company is more important than the Communist party. With the announcement by Alibaba for a primary listing in Hong Kong, the company will also keep its listing in the United States.
The move was announced on Tuesday would see Alibaba become the first large dual-primary listed company on the New York Stock Exchange and Hong Kong Stock Exchange, taking advantage of a new rule allowing dual primary listings, reported Al Jazeera.
In January, the Hong Kong Stock Exchange (HKEX) announced it would allow “innovative” Chinese companies with weighted voting rights or variable interest entities – where a company sets up an offshore entity that allows foreign investors to buy into the stock – to carry out dual primary listings in the city.
Alibaba’s CEO Daniel Zhang said that the company was pursuing another primary listing venue to foster a “wider and more diversified investor base”.
Alibaba was once a darling of technology stock investors however, the e-commerce giant saw its stock price plummet after Beijing launched a sweeping crackdown on the private industry that left the company with a USD 2.8bn fine and scuppered the initial public offering (IPO) of its affiliate Ant.
Alibaba’s stock jumped four per cent at the start of trading in Hong Kong amid expectations the move would give mainland China investors easier access to its shares.