Alibaba (BABA) Cuts 34% of Workforce in 2025 as Retail Units Sold

TLDR

• Alibaba’s workforce fell 34% in 2025, from 194,320 to 128,197 employees
• Profit dropped 67% in Q4; revenue missed analyst expectations
• Hong Kong-listed stock fell 6% Friday following the earnings report
• Workforce cuts largely driven by the sale of offline retail units Sun Art and Intime
• Alibaba launched agentic AI service Wukong and raised cloud prices up to 34%

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Alibaba’s latest earnings report landed with a thud on Thursday. Profit fell 67% for the final quarter of 2024, revenue missed expectations, and the company revealed its headcount had shrunk by roughly 34% over the course of 2025. Investors weren’t happy — Hong Kong-listed stock dropped 6% on Friday.

Alibaba Group Holding Limited, BABA

The headcount now stands at 128,197, down from 194,320 a year earlier. That’s a loss of more than 66,000 jobs in twelve months.

The biggest driver of the cuts was Alibaba’s exit from physical retail. The company sold its stake in Sun Art Retail Group at the end of 2024 and also stepped away from department store chain Intime around the same time. Both moves shed large numbers of employees tied to brick-and-mortar operations.

This wasn’t the first round of cuts. In December 2024, Alibaba had already trimmed its workforce by 11% year over year. But that looks modest next to the scale of what came after.

Earnings Miss Adds Pressure

The numbers behind the headcount news were just as rough. Profit plunged 67% for the October–December quarter, and revenue came in below what analysts had forecast. That combination sent the Hong Kong stock down sharply when markets opened Friday.

The results reflect a company in the middle of a major reset — shedding older, heavier parts of the business while trying to build something leaner around technology.

Alibaba remains China’s second-largest tech company by market cap, but it’s operating in a tough environment. Revenue growth in some of its core areas has slowed, and competition in Chinese e-commerce and cloud services remains intense.

AI Push Takes Center Stage

While the earnings and job cuts grabbed headlines, Alibaba also used the week to push its AI agenda forward.

The company launched Wukong, an agentic AI service aimed at enterprise customers. It also raised prices on its cloud and storage services by as much as 34%, citing stronger demand and rising supply chain costs.

CEO Eddie Wu told analysts on Thursday’s earnings call that Alibaba aims to grow its cloud and AI revenue to over $100 billion annually within the next five years.

The company wants to build what it calls a full-stack AI business — covering everything from chip development to computing infrastructure to AI models. It’s an ambitious target that would require the company to compete not just with domestic rivals but with global cloud players.

Cloud prices going up 34% at the same time cloud ambitions are being announced is a deliberate move. It signals Alibaba is prioritizing margin and investment capacity over market share in the short term.

The week’s news — weak earnings, heavy job cuts, a new AI product, and a cloud price hike — tells the story of a company making hard choices as it pivots toward a new growth model.

The stock was down 0.38% in recent trading following Friday’s sharper 6% decline.

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