Multinational technology company Alibaba Group has announced downsizing its metaverse division, resulting in layoffs for multiple former employees. This restructuring is aimed at increasing organizational efficiency and streamlining operations.
The labor cuts have affected the original offices in both Z Jiang’s capitals, Shanghai and Hangzhou. Ewansing, founded in 2021 by Alibaba during the surge in Metaverse interest, was located to explore this new technology. Yuanjing, who had received financial investments worth “billions of people” previously employed hundreds of staff.
Despite the layoffs, Alibaba’s metaverse division is believed to be continuing to focus on developing metaverse applications, tools and services aimed at customers.
Alibaba’s involvement in the metaverse includes investments, including leading the $60 million funding round for Chinese augmented reality (AR) maker NREAL. AR, along with Virtual Reality (VR) and Mixed Reality (MR), is widely viewed as a key gateway for accessing metaverse platforms.
More recently, Yuanjing has been working on a cloud-based operating system designed to support metaverse integration in video games and various industrial applications.
Alibaba’s decision to cut the Metaverse workforce reflects a broader trend among major technology companies. This reduces investment in the highly publicized metaverse sector while channeling more resources into AI.
In October of the previous year, Facebook’s parent company Meta Platforms reportedly fired an employee in the Facebook Agile Silicon team, part of its Reality Labs division focused on Metaverse-related semiconductor development. Similarly, Baidu experienced a change in leadership in the Metaverse division when his executive, Ma Jie, left the company in May. The move comes as Baidu redirected its focus on AI advancement following the global adoption of ChatGPT by US-based startup Openai a few months ago.