Alibaba Group is cutting over a third of staff in its in-house deals team, four people with knowledge of the matter said, after Beijing's sweeping regulatory crackdown sharply slowed the Chinese e-commerce behemoth's dealmaking pace.
Alibaba plans to reduce its strategic investment team of
more than 110 people, mainly based in mainland China, to about 70, said two of
the people, adding the company has already informed a bulk of staffers of their
redundancy.
The job cuts mainly involve mid-level and senior people in
the mainland, said the two people, declining to be named as they were not
authorised to speak to the media. The company's deals team also has staff in
Hong Kong, they added.
Alibaba did not immediately respond to a request for
comment.
Alibaba and its main rival Tencent planned to cut tens of
thousands of jobs combined this year in one of their biggest layoff rounds as
the crackdown and China's COVID-19 curbs stifled growth, Reuters reported in March.
TikTok owner ByteDance also shrunk its investment team and
was dissolving a sub-group focused on financial returns in response to
regulatory crackdowns in China, sources familiar with the matter told Reuters
in January.
Chinese regulators launched an unprecedented campaign in
late 2020 to rein in the country's technology giants after years of
laissez-faire approach that drove growth and dealmaking at breakneck speed.
On Sunday, China's market regulator imposed the latest fines
on Alibaba and Tencent as well as a range of other firms for failing to comply
with anti-monopoly rules on the disclosure of transactions.
The regulatory crackdown, coupled with a slowing economy,
has sharply slowed sales growth for most of the internet companies, smashed
their share prices, and made new capital raising and business expansion much
tougher.
That, in turn, has forced companies such as Alibaba and
Tencent to look for ways to cut operating costs.
Chinese billionaire Jack Ma's Alibaba was one of China's
most active corporate investors, having built an ecosystem of portfolio
companies across sectors including retail, local services and media and
entertainment.
Alibaba has attracted talents from major Wall Street banks
and private equity funds, including veteran Goldman Sachs dealmaker Michael
Evans, over the years to strengthen its in-house dealmaking capabilities.
In 2016 when Chinese firms were actively snapping up assets
globally, Alibaba's internal investment team grew to about 150 people, three
times larger than that of Tencent, in a bid to sustain its global dealmaking
drive, Reuters has reported.
From 2015 to 2021, Alibaba on average made about 44
investments every year, peaking in 2018 with 70 deals totalling $54 billion,
according to Dealogic. Even during the 2021 regulatory crackdown, it cut 38
deals totalling $6.2 billion. This year so far, however, Alibaba has made just
nine investments worth $5.2 billion.
The company started laying off employees from its other
business units in February and could ultimately axe more than 15% of its total
workforce, or about 39,000 staff, Reuters reported in March. -Reuters