Alibaba Streamlines Metaverse Unit Amid Sector Slowdown

Alibaba Group Holding scales down metaverse operations.Dozens of employees laid off at Yuanjing, Alibaba's metaverse unit. Shift reflects industry trend of tech companies prioritising AI over metaverse.

Credit: ALIBABA

Dozens of employees at Yuanjing, Alibaba's metaverse unit, have been let go as part of a restructuring aimed at enhancing operational efficiency, a source familiar with the matter revealed.

The move comes as Chinese companies, including Alibaba, Tencent Holdings, and others, rushed to explore opportunities in the metaverse, seen as the next frontier of the internet. Yuanjing, which had previously received substantial investment, is now undergoing changes to focus on metaverse applications and services for customers.

Alibaba's decision to downsize its metaverse workforce mirrors a broader trend among major tech firms reallocating resources from the hyped metaverse space to artificial intelligence (AI) technologies. This shift aligns with Meta Platforms' reported layoffs in its metaverse-focused division and Baidu's refocus on AI, indicating a strategic industry-wide pivot.

Yuanjing's initiatives included developing a cloud-based operating system for metaverse applications in gaming and various industries, showcasing Alibaba's commitment to exploring diverse metaverse-related technologies. Despite the recent slowdown, Chinese local governments continue to push forward with metaverse projects, with Zhejiang province launching a development plan to boost metaverse-related industries by 2025.

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• Alibaba Group Holding scales down metaverse operations

• Dozens of employees laid off at Yuanjing, Alibaba's metaverse unit

• Shift reflects industry trend of tech companies prioritising AI over metaverse

Source: SCMP