Alibaba Group, the Chinese e-commerce giant, is streamlining its operations in the metaverse space in order to improve efficiency. According to the South China Morning Post, Alibaba’s metaverse unit, Yuanjing, has recently laid off a number of employees. The job cuts have affected the unit’s operations in Shanghai and Hangzhou. Previously, Yuanjing had a workforce of several hundred employees and had made significant investments in the metaverse industry.
Despite the job cuts, the metaverse unit will continue to remain active. Its focus will be on developing metaverse applications and tools, as well as providing related services to its customers. However, Alibaba has not yet responded to requests for comment on the matter.
Alibaba’s early entry into the metaverse space demonstrates its strategic vision. The company first ventured into the metaverse in 2022 and further deepened its involvement in March 2023 by leading a funding round for Nreal, a maker of augmented reality glasses. This move reflects Alibaba’s commitment to enhancing digital consumer experiences. Janet Wang, the head of Alibaba’s luxury division, pointed out that the company’s metaverse projects began before the term “metaverse” became popular, indicating its forward-thinking approach in transforming digital shopping into an interactive and immersive experience.
It is worth noting that the metaverse industry is projected to experience significant growth. Experts predict a compound annual growth rate of 44.4% from 2023 to 2030, with the market expected to reach a valuation of $1.6 trillion by the end of the decade.
Last year, Alibaba Cloud, the cloud computing arm of Alibaba Group, joined forces with Avalanche, a layer-1 blockchain platform, to launch a blockchain-based metaverse. This partnership aimed to bring innovation to the metaverse by creating decentralized, secure, and scalable virtual environments. Additionally, Alibaba recently appointed Joseph Tsai, a pro-crypto executive, as its new Chairman, signaling a new era for the company. Tsai succeeded long-time chief Daniel Zhang in this role.