TechFlow news, November 4 — According to the *South China Morning Post*, Alibaba Group is scaling down its metaverse operations. Sources familiar with the matter said dozens of employees at Yuanjing, Alibaba’s metaverse division, have been laid off across offices in Shanghai and Hangzhou. The layoffs are reportedly part of a broader organizational restructuring aimed at improving operational efficiency.
Yuanjing previously received hundreds of millions of yuan in investments and employed hundreds of staff. Despite the workforce reduction, the unit will continue operating, shifting focus toward developing metaverse applications and tools, as well as providing metaverse-based services for clients. In 2021, Alibaba and several other Chinese tech firms rushed to register metaverse-related trademarks and explore opportunities in virtual worlds. However, as industry enthusiasm cools, global technology companies including Meta and Baidu have also adjusted their metaverse strategies.
Alibaba's prior metaverse investments include leading a $60 million funding round for AR glasses maker Nreal and developing a cloud-based metaverse operating system for gaming and industrial applications. While some local governments continue advancing metaverse-related initiatives, state media have repeatedly warned against excessive market speculation.
