Alibaba Lays Off Employees in Metaverse Division

Alibaba Group is scaling back its metaverse operations, resulting in the layoff of dozens of employees from its Yuanjing division located in Shanghai and Hangzhou. This restructuring aims to improve efficiency as the tech giant reallocates resources in response to the declining popularity of the metaverse, overshadowed by the rising interest in artificial intelligence (AI). Despite the layoffs, the Yuanjing unit will continue to operate, focusing on developing metaverse applications, tools, and services. Established in 2021, the unit had previously received significant investments and employed hundreds. This trend is mirrored across the tech industry, where many companies are shifting focus from metaverse initiatives to AI development due to the latter's proven effectiveness and lower entry costs. Notably, Alibaba had previously invested in augmented reality ventures, indicating a strategic interest in hybrid digital experiences.