Alibaba mimics Amazon by slashing jobs after poor results
(2022/08/09)
- Reference: 1660068014
- News link: https://www.theregister.co.uk/2022/08/09/alibaba_cuts_jobs/
- Source link:
Alibaba's woes continue, with the Chinese tech giant's latest financial reports indicating it cut nearly 10,000 jobs, or around 3.8 percent of its workforce, in the second quarter of 2022.
Alibaba's revenue took its [1]first-ever quarterly dive [PDF], though the loss was smaller than analysts expected, mostly buoyed by a 10 percent year-over-year increase in [2]revenue from its cloud segment .
According to the South China Morning Post , which is owned by Alibaba, the tech giant's headcount reduction is [3]its first since 2016. Citing reports from Alibaba insiders, the Post said many of the cuts began in May and came from ecommerce site Taobao Marketplace, Slack competitor DingTalk and, despite growth, Alibaba's cloud team.
[4]
Toby Xu, Alibaba's chief financial officer, [5]said during the company's Q2 [6]earnings call that Alibaba is currently focused on "high quality growth, improving operating efficiency, optimizing cost structure and maintaining strong cash flow and net cash position." In other words, Alibaba is cutting back to stem its financial leaks.
[7]
[8]
There are a lot of factors to consider in Alibaba's 2022 downturn: COVID lockdowns in China have hampered its ability to operate, Chinese authorities are [9]cracking down on tech monopolies and the US government has [10]threatened to delist it from the New York Stock Exchange this year.
Although it might sound counterintuitive, Alibaba continues to hire, CEO Daniel Zhang said during the earnings call. "Despite all of the macro uncertainties that we see out there, I'm pleased to tell you that we've hired 6,000 fresh university graduates from across China," zhang said. It's unclear what roles the new hires will fill.
[11]
While Alibaba cut a little less than 4 percent of its workforce in Q2, Amazon cut nearly 100,000, equivalent to approximately 6 percent of its total staff in the same three months, which Barrons [12]said is the largest single quarter cut in the company's history.
[13]China's internet companies are decelerating cloud consumption, says Alibaba
[14]Alibaba's e-commerce arm counts carbon to encourage you to buy more stuff
[15]US authorities threaten Alibaba with NYSE delisting
[16]Amazon's carbon footprint spread 18% in 2021
Like Alibaba, Amazon posted [17]profits on the cloud side , but losses elsewhere as [18]ecommerce sales have dipped while consumers return to brick-and-mortar stores and/or save money to handle the coming recession.
Amazon has been relatively transparent about the reasons for its staff cuts: It had to hire more people in warehouses to meet demand, which is subsiding along with COVID. Amazon even [19]warned of such last quarter, so its cuts shouldn't come as a surprise.
Amazon CFO Brian Olsavsky pointed to Q1 hiring as one of the key reasons for the historically large cuts. "We had hired a lot of people in Q1 for the coverage of the Omicron variant. Luckily, that variant subsided, and we were left with a higher headcount position," Olsavsky said.
"I would note that we're still up 188,000 year over year and nearly double the headcount of what we had heading into the pandemic in early 2020," Olsavsky added.
[20]
If we take Amazon's statements at face value, its headcount reduction has been entirely due to [21]pandemic overstaffing . Alibaba, on the other hand, is facing headwinds from regulators domestically and abroad.
One of its plans for economic recovery involves becoming [22]dual-primary listed on both the NYSE and Hong Kong Stock Exchange, over which CFO Xu expressed confidence; "By becoming primary listed on both Hong Kong and New York stock exchanges, we aim to further expand and diversify our investor base."
But that diversification comes with one big "if." Without resolving its differences with the Securities and Exchange Commission, Alibaba could end up without a NYSE listing, which is unlikely to help it rebound. ®
Get our [23]Tech Resources
[1] https://www.alibabagroup.com/en/news/press_pdf/p220804a.pdf
[2] https://www.theregister.com/2022/08/05/alibaba_q2_2022/
[3] https://www.scmp.com/tech/big-tech/article/3187911/alibaba-sheds-nearly-10000-employees-june-quarter-e-commerce-giant
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2YvLZBud0nRpOJYWTVgR5JgAAAFM&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[5] https://seekingalpha.com/article/4529754-alibaba-group-holding-limited-baba-ceo-daniel-zhang-on-q2-2022-results-earnings-call
[6] https://www.alibabagroup.com/en/ir/earnings
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YvLZBud0nRpOJYWTVgR5JgAAAFM&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[8] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33YvLZBud0nRpOJYWTVgR5JgAAAFM&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[9] https://www.forbes.com/sites/qai/2022/07/13/alibaba-and-tencent-fined-in-china-tech-crackdown/
[10] https://www.theregister.com/2022/08/01/us_authorities_threaten_alibaba_with/
[11] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YvLZBud0nRpOJYWTVgR5JgAAAFM&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[12] https://www.barrons.com/articles/amazon-jobs-cuts-staff-51659122765
[13] https://www.theregister.com/2022/08/05/alibaba_q2_2022/
[14] https://www.theregister.com/2022/08/09/alibaba_carbon88/
[15] https://www.theregister.com/2022/08/01/us_authorities_threaten_alibaba_with/
[16] https://www.theregister.com/2022/08/03/amazon_carbon_report/
[17] https://www.cnbc.com/2022/07/28/amazon-amzn-q2-2022-earnings.html
[18] https://www.mckinsey.com/business-functions/growth-marketing-and-sales/our-insights/how-us-consumers-are-feeling-shopping-and-spending-and-what-it-means-for-companies
[19] https://www.washingtonpost.com/technology/2022/05/05/amazon-warehouses-overstaffing/
[20] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33YvLZBud0nRpOJYWTVgR5JgAAAFM&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[21] https://www.theregister.com/2022/06/02/tech_layoff_hiring/
[22] https://www.theregister.com/2022/07/26/alibaba_dual_primary_listing/
[23] https://whitepapers.theregister.com/
Alibaba's revenue took its [1]first-ever quarterly dive [PDF], though the loss was smaller than analysts expected, mostly buoyed by a 10 percent year-over-year increase in [2]revenue from its cloud segment .
According to the South China Morning Post , which is owned by Alibaba, the tech giant's headcount reduction is [3]its first since 2016. Citing reports from Alibaba insiders, the Post said many of the cuts began in May and came from ecommerce site Taobao Marketplace, Slack competitor DingTalk and, despite growth, Alibaba's cloud team.
[4]
Toby Xu, Alibaba's chief financial officer, [5]said during the company's Q2 [6]earnings call that Alibaba is currently focused on "high quality growth, improving operating efficiency, optimizing cost structure and maintaining strong cash flow and net cash position." In other words, Alibaba is cutting back to stem its financial leaks.
[7]
[8]
There are a lot of factors to consider in Alibaba's 2022 downturn: COVID lockdowns in China have hampered its ability to operate, Chinese authorities are [9]cracking down on tech monopolies and the US government has [10]threatened to delist it from the New York Stock Exchange this year.
Although it might sound counterintuitive, Alibaba continues to hire, CEO Daniel Zhang said during the earnings call. "Despite all of the macro uncertainties that we see out there, I'm pleased to tell you that we've hired 6,000 fresh university graduates from across China," zhang said. It's unclear what roles the new hires will fill.
[11]
While Alibaba cut a little less than 4 percent of its workforce in Q2, Amazon cut nearly 100,000, equivalent to approximately 6 percent of its total staff in the same three months, which Barrons [12]said is the largest single quarter cut in the company's history.
[13]China's internet companies are decelerating cloud consumption, says Alibaba
[14]Alibaba's e-commerce arm counts carbon to encourage you to buy more stuff
[15]US authorities threaten Alibaba with NYSE delisting
[16]Amazon's carbon footprint spread 18% in 2021
Like Alibaba, Amazon posted [17]profits on the cloud side , but losses elsewhere as [18]ecommerce sales have dipped while consumers return to brick-and-mortar stores and/or save money to handle the coming recession.
Amazon has been relatively transparent about the reasons for its staff cuts: It had to hire more people in warehouses to meet demand, which is subsiding along with COVID. Amazon even [19]warned of such last quarter, so its cuts shouldn't come as a surprise.
Amazon CFO Brian Olsavsky pointed to Q1 hiring as one of the key reasons for the historically large cuts. "We had hired a lot of people in Q1 for the coverage of the Omicron variant. Luckily, that variant subsided, and we were left with a higher headcount position," Olsavsky said.
"I would note that we're still up 188,000 year over year and nearly double the headcount of what we had heading into the pandemic in early 2020," Olsavsky added.
[20]
If we take Amazon's statements at face value, its headcount reduction has been entirely due to [21]pandemic overstaffing . Alibaba, on the other hand, is facing headwinds from regulators domestically and abroad.
One of its plans for economic recovery involves becoming [22]dual-primary listed on both the NYSE and Hong Kong Stock Exchange, over which CFO Xu expressed confidence; "By becoming primary listed on both Hong Kong and New York stock exchanges, we aim to further expand and diversify our investor base."
But that diversification comes with one big "if." Without resolving its differences with the Securities and Exchange Commission, Alibaba could end up without a NYSE listing, which is unlikely to help it rebound. ®
Get our [23]Tech Resources
[1] https://www.alibabagroup.com/en/news/press_pdf/p220804a.pdf
[2] https://www.theregister.com/2022/08/05/alibaba_q2_2022/
[3] https://www.scmp.com/tech/big-tech/article/3187911/alibaba-sheds-nearly-10000-employees-june-quarter-e-commerce-giant
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2YvLZBud0nRpOJYWTVgR5JgAAAFM&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[5] https://seekingalpha.com/article/4529754-alibaba-group-holding-limited-baba-ceo-daniel-zhang-on-q2-2022-results-earnings-call
[6] https://www.alibabagroup.com/en/ir/earnings
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YvLZBud0nRpOJYWTVgR5JgAAAFM&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[8] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33YvLZBud0nRpOJYWTVgR5JgAAAFM&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[9] https://www.forbes.com/sites/qai/2022/07/13/alibaba-and-tencent-fined-in-china-tech-crackdown/
[10] https://www.theregister.com/2022/08/01/us_authorities_threaten_alibaba_with/
[11] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44YvLZBud0nRpOJYWTVgR5JgAAAFM&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[12] https://www.barrons.com/articles/amazon-jobs-cuts-staff-51659122765
[13] https://www.theregister.com/2022/08/05/alibaba_q2_2022/
[14] https://www.theregister.com/2022/08/09/alibaba_carbon88/
[15] https://www.theregister.com/2022/08/01/us_authorities_threaten_alibaba_with/
[16] https://www.theregister.com/2022/08/03/amazon_carbon_report/
[17] https://www.cnbc.com/2022/07/28/amazon-amzn-q2-2022-earnings.html
[18] https://www.mckinsey.com/business-functions/growth-marketing-and-sales/our-insights/how-us-consumers-are-feeling-shopping-and-spending-and-what-it-means-for-companies
[19] https://www.washingtonpost.com/technology/2022/05/05/amazon-warehouses-overstaffing/
[20] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33YvLZBud0nRpOJYWTVgR5JgAAAFM&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[21] https://www.theregister.com/2022/06/02/tech_layoff_hiring/
[22] https://www.theregister.com/2022/07/26/alibaba_dual_primary_listing/
[23] https://whitepapers.theregister.com/
Re: "6,000 fresh university graduates"
M.V. Lipvig
Yes, but no. China already knows how to use slave labor, considering they use it on the manufacturing side. All they had to do if money was the reason is tell the existing workers that their new wage is the current starting wage. Or less. And, screw up or stop reporting to work and it's off to the reeducation camps while your family moves to the exciting world of holding a rope attached to a watet buffalo in a rice paddy to count how many times per day the water buffalo fertilizes the rice. No, there's something else going on there. For all we know, the 6000 new employees are part of the 10,000 let go.
Shame for Amazon
M.V. Lipvig
All those warehouse workers wasted, since Amazon never hires anyone that's worked for them before. There are only so many box stuffers available in the world willing to piss in a bottle for 15 bucks an hour.
Big part of why I stopped ordering anything from them, really. Who wants their stuff handled by crotchfingers?
"6,000 fresh university graduates"
Or, to put it bluntly, 6000 minimum-wage slaves to replace 10000 experienced and expensive employees.
Can't deny that Chinese companies have well learned from American companies just how to keep costs down.