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Alibaba Scales Back Metaverse Operations with Layoffs in Yuanjing Subsidiary

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Alibaba has laid off dozens of employees from its metaverse division, Yuanjing, as the company restructures to improve efficiency, according to the South China Morning Post. This move follows similar actions by other tech giants, including Baidu and Meta, which have shifted focus from the metaverse to emerging technologies like AI.

Yuanjing, founded in 2021, was tasked with creating metaverse-related solutions and products, such as a cloud operating system primarily used in video gaming and later expanded for industrial applications. Despite an investment of billions of yuan, the subsidiary has not achieved the traction Alibaba initially anticipated. While Yuanjing will continue to operate, its focus will be on refining metaverse-based tools and services.

Alibaba’s pivot echoes moves by Baidu and Meta, both of which have adjusted their metaverse strategies in favor of AI. Meta’s Reality Labs division, which leads its metaverse efforts, reported a $4.4 billion loss in Q3, bringing total losses since 2020 to $58 billion. Despite the cutbacks, CEO Mark Zuckerberg remains committed to the division’s long-term potential.

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