Alibaba Group has initiated a workforce reduction within its metaverse-focused division, Yuanjing, to enhance operational efficiency. As reported by the South China Morning Post, Yuanjing has laid off several employees across its Shanghai and Hangzhou offices, impacting dozens within a department that previously housed several hundred employees after substantial investment in the metaverse.
Despite the layoffs, Alibaba’s Yuanjing unit will continue its work, maintaining a focus on creating metaverse applications, tools, and related customer services. Alibaba has not responded to requests for comment from Cryptonews as of press time.
Alibaba’s Strategic Entry into the Metaverse Sector
Alibaba ventured into the metaverse space around 2022 and deepened its involvement by leading a funding round for AR glasses manufacturer Nreal by March 2023. Janet Wang, who heads Alibaba’s luxury division, highlighted that Alibaba’s work in digital experiences began even before the “metaverse” gained widespread recognition, showcasing the company’s vision for transforming online shopping into an interactive experience.
The metaverse market is expected to grow significantly, with projections estimating a compound annual growth rate (CAGR) of 44.4% from 2023 to 2030, reaching a potential $1.6 trillion valuation by the end of the decade.
Pro-Crypto Leadership Brings New Direction
In a move signaling Alibaba’s commitment to innovation in the metaverse, its cloud computing branch, Alibaba Cloud, partnered with Avalanche, a layer-1 blockchain, to develop blockchain-driven metaverse spaces. This collaboration aims to create secure and scalable virtual environments. In addition, Alibaba recently appointed Joseph Tsai, a pro-crypto executive, as its new Chairman, marking a new era of strategic growth and blockchain-based ventures.
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