Will Alibaba lay off more than 66,000 employees in 2025?

On March 19, Alibaba Group announced its third-quarter financial report for the fiscal year ending December 31, 2026: on one hand, AI + cloud business revenue increased by 36% year-over-year; on the other hand, the number of employees sharply decreased by over 66,000, a 34% decline.

Employee Count Plummets: from 194,000 to 128,000

According to the financial report, as of December 31, 2025, Alibaba Group’s total employee count was 128,197, a significant reduction of 66,123 employees from 194,320 in the same period of 2024, roughly a 34% decrease. From a calendar year perspective, this means Alibaba reduced over 66,000 employees in 2025.

However, it should be noted that the main reason for this large-scale reduction is Alibaba’s divestment of two offline retail assets during the third quarter of fiscal year 2025 (October-December 2024):

Gourmet Retail (RT-Mart): On January 1, 2025, Alibaba announced the sale of all its shares in Gourmet Retail, holding approximately HKD 13.138 billion, representing about 78.7% of Gourmet Retail’s issued shares. As of September 30, 2024, Gourmet Retail had about 85,778 employees.

Yintai Department Store: In December 2024, Alibaba sold all its Yintai shares (99% stake) to Yageo Group for approximately RMB 7.4 billion.

After these transactions, nearly 90,000 employees previously included in Alibaba’s consolidated financial statements were “removed,” no longer counted in the group’s total employee number.

Strategic Focus: From “New Retail” to “AI-Driven”

Clearly, Alibaba’s large-scale staff reduction is not merely a matter of layoffs but a necessary result of its strategic shift. If we exclude the employees from divested assets, Alibaba’s employee count might have actually increased significantly.

Since establishing the “User First, AI-Driven” dual strategy in 2023, Alibaba has explicitly indicated it will orderly exit non-core assets and focus on core business development. In 2025, Alibaba sold off its offline retail expansion—Yintai Department Store and Gourmet Retail—that was previously driven by founder Jack Ma’s “New Retail” strategy, marking a formal departure from the offline heavy asset operation model.

In this quarter, Alibaba’s operating profit declined by 74% year-over-year, and net profit fell by 66%, mainly due to continued investments in instant retail, user experience, and AI technology. Free cash flow shrank by 71% year-over-year to RMB 11.3 billion. Although performance was under pressure, this was primarily due to increased investment in core instant retail and AI-related businesses, both of which are maintaining rapid growth.

The financial report shows that instant retail revenue for this quarter was RMB 20.842 billion, a 56% increase compared to the same period in 2024, mainly driven by the order volume increase from the “Taobao Flash Sale” launched at the end of April 2025. Regarding AI + cloud business performance, as of the quarter ending December 31, 2025, Alibaba Cloud Intelligence Group’s revenue was RMB 43.284 billion, with total revenue and revenue excluding Alibaba’s consolidated business growing by 36% and 35%, respectively. This growth was mainly driven by the increase in public cloud revenue, including higher adoption of AI-related products.

Alibaba Group CEO Daniel Zhang explicitly stated that Alibaba aims to become a full-stack AI company covering semiconductor manufacturing, computing, and AI models, with the goal of surpassing $100 billion in cloud and AI revenue annually within the next five years.

Editor: Xinzhixun - Langke Jian