Flower Finance Original
Author | Chen
Edit | Duozi
Ma Yun, who returned again, no longer mentioned that 996 was a blessing, but told everyone with practical actions: Back then, what I said was the truth.
In the past few days, news about Ali's layoffs has spread on major social media. The business sectors that are rumored to have drastically cut employees, including Alibaba Cloud, Cainiao, Local Life and the newly established Taotian Group, are said to have 25,000 presidents.
On the one hand, it admits that "talent flow is always carried out by all enterprises", and on the other hand, it emphasizes that "in the face of new situations, new opportunities and new developments, Alibaba has never stopped recruiting and cultivating outstanding talents". In order to prove that what it said is true, Alibaba posted a recruitment plan for 2023: a total of 15,000 new recruits from the six major business groups, of which more than 3,000 were recruited by the school.
The personnel optimization in 15 months was 24,100
Even if the hiring plan is true, it does not prove that the layoff arrangement is all "rumors".
As early as before Alibaba Group refuted the rumor, Alibaba Cloud, which was the first to be exposed to the overall layoff of 7%, made a positive response, saying that this was "normal organizational post and personnel optimization".
Considering that this is a company with more than 200,000 employees, and the monthly movement of hundreds of people is indeed normal, the reason why the news of this layoff will attract so much attention is that the number of Alibaba's employees has decreased a little bit over the past year.
According to Alibaba's publicly released financial report, the number of Alibaba Group employees decreased by a total of 19,576 in 2022, including 4,375, 9,241, 1,797 and 4,163 in the four quarters. In the first quarter of 2023, the number of Alibaba employees decreased again by 4,524. A new high year-on-year. In other words, in the 15 months since 2022, the number of Alibaba employees has been reduced by 24,100, equivalent to one-tenth of the number of employees at the end of 2021.
Compared with Ma Yun's goal of "exporting 1,000 Ali people" to society every year, it is equivalent to completing the task by 20 times.
Number of employees of Alibaba over the years Source: Internet
As one of the recognized double giants in the domestic Internet circle, this is by no means the norm. It should be known that before that, Alibaba Group's employee growth has been positive for a long time, and in the four years from 2018 to 2021, it has just completed a round of rapid expansion, and the total number of employees has successively passed the two major thresholds of 100,000 and 200,000.
Even in 2019, due to the epidemic and the economic environment, when major companies announced layoff plans one after another, Alibaba's then CEO Daniel Zhang announced in a high profile that not only would he not lay off employees, but would continue to open recruitment to "help the society create more jobs", and he also emphasized that when the economy is not good, "the biggest value of the platform economy is to create jobs".
That year, Alibaba's workforce jumped to 116519 from 66,421 at the end of 2018, fulfilling its Daniel Zhang promise. At the end of 2020, due to the merger of Sun Art Retail, the number of Alibaba employees doubled again, reaching 252084. At the end of 2021, the number of Alibaba employees increased by more than 7,000 to 259316.
Such rapid growth came to an abrupt end in 2022. At that time, Alibaba also reported a series of large layoffs, this official clarification, but also specifically emphasized that all these rumors are just old news in 2022, and they have been taken out to re-hype.
Compared with the enthusiasm when he just took over as CEO of Alibaba Group in 2019, the top management of Alibaba, led by Daniel Zhang, did not respond to the layoffs, as a representative of the "platform economy", Alibaba's greatest value at the moment is obviously no longer "job creation".
Reducing staff to increase efficiency, spin-off and listing has become Alibaba's top priority.
The growth rate is much lower than that of Alibaba Cloud in the industry
On May 18, just a few days before the news of Alibaba Cloud's layoffs, Daniel Zhang, CEO of Alibaba Group and chairman of Alibaba Cloud Intelligent Group, while announcing his financial report, sent a letter to Alibaba Cloud employees saying that in view of the huge differences between the business model, customer characteristics and development stage of Cloud Intelligence Group and most of Alibaba Group's consumer Internet business, it is planned to completely spin off Cloud Intelligence Group from Alibaba Group and complete the listing in the next 12 months. Formed a new company completely independent of Alibaba Group in terms of equity and corporate governance.
Alibaba's new architecture Source: Network
This is another major move after Alibaba announced at the end of March that it launched an organizational change called "1+6+N" and established six business groups called Cloud Intelligence Group, Taotian Group, Local Life Group, Cainiao Group, International Digital Business Group, Dawen Entertainment Group and a number of (N) business companies.
Daniel Zhang said in the letter that the spin-off is for better development and is a new beginning for Alibaba Cloud's second entrepreneurship in the future. In the future, Alibaba Cloud can be completely independent for the market, optimize its organization and operations, and "build a world-class technology company." ”
In view of Daniel Zhang's identity, the outside world has speculated a lot about his statement. Among them, there is a view that this will be the beginning of the gradual spin-off of the Ali empire, and the ensuing layoff news is more like a CFO-turned Daniel Zhang as the CEO of Alibaba and the chairman of Alibaba Cloud for Taotian, Cainiao and other major groups to make a demonstration - since it has been decided to spin off and go public, why not make the financial report better before listing through staff reduction?
According to Alibaba Group's latest financial report, Alibaba Cloud Intelligence's total revenue in fiscal 2023 was 77.203 billion yuan, and the adjusted net profit was 1.422 billion yuan, a year-on-year increase of 24%, although it is still one of the few cloud vendors in China that can achieve profitability, but this "second growth pole" that was once highly hoped by Alibaba Group is experiencing multiple internal and external pressures.
According to the latest report released by market research institute IDC, the overall market size of China's public cloud services in the second half of 2022 was US$18.84 billion, a year-on-year growth rate of only 19%, compared with the previous growth rate of 450%. Alibaba Cloud's revenue growth rate also began to experience a continuous decline in 2020, from more than 50% to about 3%.
Excluding the slowdown in industry growth, for Alibaba Cloud, the rise of a large number of peers is the reason why it feels pressure.
IDC's report also shows that in the domestic cloud service market, Alibaba Cloud's market share has dropped from 38.6% in the first half of 2021 to 32.6% in the second half of 2022. Although it is still the manufacturer with the largest market share in China, the growth rate of 7.2% in the same period is far lower than the average growth rate of 15.7% in the industry, and the leading position is no longer stable.
On the contrary, since the second half of 2022, HUAWEI CLOUD's share has risen sharply, even replacing Tencent Cloud, rising from third to second place, and the three major telecom operators that used to be Alibaba Cloud customers have also had a strong impact on Alibaba Cloud after building their own cloud services, and the revenue growth rate of Tianyi Cloud, Mobile Cloud, and Unicom Cloud has exceeded 100% in the same period.
Alibaba's share price fell 70% in three years
Aliyun's experience, Alibaba's other business segments, have not escaped.
On May 18, Cainiao Group, which was approved by Alibaba's board of directors and is expected to complete its listing in the next 12 to 18 months, although it leads Alibaba's six major groups with a year-on-year revenue growth rate of 21%, has been in a loss-making state for a long time, and now in addition to facing the competition of JD Logistics and SF, Jitu that has successively acquired Best and Fengwang has also become a strong opponent.
Alibaba's major business sectors Source: Network
Alibaba's local life sector, with Ele.me as the core, is also in a clear downside in the competition with Meituan, with a loss of 14.021 billion yuan in fiscal 2023, which is another hardest hit area in addition to Alibaba Cloud, which has been frenzied to have laid off employees. According to data from third-party data agencies, in 2023, Ele.me's market share will be about 20%, less than one-third of Meituan's takeaway.
So far, the situation of Taotian Group, which still contributes 60% of Alibaba's revenue and nearly 90% of its profits, is more complicated.
In Alibaba's financial statements, Taobao, Tmall, Taote, Taocaicai, Freshippo, Tmall Supermarket, Sun Art Retail, Tmall Global and Alibaba Health are all classified as retail commercial businesses in China. According to its latest FY2023 financial report, the revenue of retail commerce in China is 5653. 300 million yuan, down 2% from 574.87 billion yuan in fiscal 2022, of which the "customer management revenue" of Taobao and Taote directly decreased by 8% year-on-year.
In the statistics of third-party magic mirror market intelligence, although Taobao Tmall is still the leader of domestic e-commerce in terms of transaction volume, its growth has reached the ceiling. In 2022, the total GMV of Taobao Tmall platform was 7.17 trillion yuan, down 7% year-on-year, and GMV in the first quarter of this year was 1.5 trillion yuan, down 6% year-on-year.
At the same time, the sprang up Pinduoduo and live streaming e-commerce led by Douyin are rapidly seizing the market share given by Alibaba. In 2022, Pinduoduo's annual GMV will exceed 3.3 trillion yuan, a year-on-year increase of more than 30%, and the GMV of Douyin live streaming e-commerce will also exceed one trillion, reaching about 1.4 trillion, a year-on-year increase of 80%. Even Alibaba's old rival JD.com achieved a year-on-year increase in GMV of 5.6% in 2022, reaching 3.47 trillion yuan. According to Goldman Sachs, Taobao Tmall's market share has fallen from 66% in 2019 to around 44% in 2022, a drop of a third in four years.
Alibaba's revenue growth has stagnated Source: Network
In the face of the challenge of crowds, Alibaba's fall from the peak is an indisputable fact, and this is the root cause of its repeated news of layoffs. In September 2020, Alibaba's market value began to decline after hitting a record of HK$6.69 trillion, and as of the press release of Flower Finance, the market value was only 1.65 trillion, a decline of more than 70% in less than three years.
When evaluating Jack Ma's business achievements, whether it is "Jack Ma's era" or "Jack Ma of the era", it will always attract debate, and now it seems that Jack Ma, who opened the era of e-commerce, has to face the fate of being left behind by the times after the end of barbaric growth in the Internet industry and the disappearance of dividends.
Jack Ma's return will not save Alibaba.
*This article is based on publicly available information and is for informational purposes only and does not constitute any investment advice
(Produced by Flower Financial Observation)