Alibaba cut a third of its staff last year and is now focusing on artificial intelligence

Short Summary

In December 2025, Alibaba’s workforce fell to 128,197 employees – 34 % fewer than in December 2024 (194,320). The reduction was the result of several factors: the sale of retail businesses Sun Art and Intime, as well as a heightened focus on AI and increased pricing for cloud services.

1. What happened to the workforce size
Period | Number of Employees | Change
December 2024 | 194,320 | —
December 2025 | 128,197 | –34 %

- In Q1 2025 almost half the staff was cut after selling Sun Art and Intime.
- Reductions began already in December 2024 (11 %) and continue to this day.

2. Reasons for cuts
Factor | Description
Sale of retail businesses Sun Art (end 2024) + Intime (approximately around the same period) | Business restructuring – removal of non‑core assets, focus on AI and cloud services
Rising costs | Supply chain → higher pricing for cloud services (+34 %)

3. Financial results (Q4 2025)
- Profit fell by 67 %.
- Revenue did not meet investor and analyst expectations.
- Shares on the Hong Kong Stock Exchange dropped 6 % on Friday.

4. Strategic focus
- Alibaba aims to become a “full‑service” AI provider: from semiconductor manufacturing to computing platforms and AI models.
- The agent AI service Wukong was recently launched.
- CEO Eddie Wu announced plans to achieve over $100 billion in annual revenue from cloud and AI services within five years.

5. Conclusion
Alibaba continues aggressive workforce reductions while simultaneously boosting investments in artificial intelligence and cloud technologies. This is a step toward transforming the company into a global leader in digital services, despite current financial challenges and declining share prices.