Alibaba’s metaverse division, Yuanjing, has laid off staff amidst restructuring, though it will continue offering metaverse-related services.
According to recent reports, the Chinese e-commerce giant Alibaba is gradually decreasing its operations in the metaverse, following in the footsteps of other tech titans that have lowered their resources in the once-exciting industry.
Alibaba’s owned South China Morning Post reported that the metaverse branch of the company has laid off dozens of staff as part of its ongoing restructuring efforts and efforts to increase operational efficiency.
In 2021, Alibaba established the Yuanjing metaverse arm of the company, which has activities in both Shanghai and Hangzhou. Alibaba acted in response to the growing interest in virtual world platforms and related technologies.
Artificial intelligence has become the latest big thing in technology, which has caused the euphoria surrounding the once-booming sector to diminish. This is because artificial intelligence requires more resources and investment from businesses that want to keep up with it.
The division, which reportedly got “billions of yuan” in investment and had previously employed a few hundred personnel, will continue to operate, according to the source, and it will continue to provide metaverse applications, tooling, and services.
As part of its metaverse goals, Alibaba also led a funding round in March 2022 by investing sixty million dollars in Nreal, a Chinese company that manufactures augmented reality glasses.
In addition, a number of other large Chinese technology companies, such as Tencent, ByteDance, and Baidu were competing with one another to register trademarks in an effort to capitalize on the potential of the metaverse industry during that period of time.
The most recent layoffs are a reflection of a larger industry trend in which big technology corporations are transferring their focus from the metaverse to the development of artificial intelligence.
Following the transition of the Chinese search giant Baidu to the development of generative artificial intelligence in May 2023, the head of metaverse operations at Baidu resigned from his position. Reuters reported at the time that Facebook parent company Meta terminated the employment of individuals in its Reality Labs section in October 2023.
Reality Labs is responsible for the development of augmented and virtual reality technology for the metaverse. Furthermore, Reality Labs reported an operating loss of $4.4 billion in the third quarter of the year, and since 2020, the company has experienced an operating loss of more than $58 billion.
It is believed that Microsoft, a multinational software corporation, terminated the Industrial Metaverse Core team in February 2023 and terminated approximately one hundred individuals who were working on the project.
During this time, Disney completed a larger restructuring in March 2023, which included the dissolution of its metaverse branch and the reduction of its workforce.
