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Alibaba Group Reduces Workforce in Metaverse Division Amid Cost-Cutting Measures!

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Alibaba Group Reduces Workforce in Metaverse Division Amid Cost-Cutting Measures

Chinese tech conglomerate Alibaba Group has reportedly laid off employees from Yuanjing, its metaverse division, as part of ongoing efforts to streamline operations and improve cost efficiency, according to the South China Morning Post. The layoffs, which impacted teams in Shanghai and Hangzhou, come as part of a broader restructuring within Alibaba, which has been navigating challenges in a slowing global economy.

Background on Yuanjing

Established in 2021, Yuanjing was Alibaba’s response to growing interest in the virtual space, joining other major tech players such as Tencent, ByteDance, Kuaishou Technology, and Li Auto in pursuing metaverse-related initiatives and trademark registrations. The division was initially seen as a pivotal move into a burgeoning sector that promised new opportunities for engagement and revenue.

Financial Investment and Initial Goals

Yuanjing received significant financial backing, reportedly amounting to “billions of yuan,” to explore metaverse applications. The division aimed to develop tools and services that would facilitate user interaction within virtual environments, reflecting the company’s ambition to be at the forefront of this emerging technology.

Recent Layoffs and Restructuring

This recent reduction follows earlier workforce cuts by Alibaba. In February 2023, the company let go of more than 4,000 employees, and in 2022, around 19,000 employees were laid off as the group responded to economic challenges and refocused on operational efficiency. The company has recently faced setbacks in its financial performance, including missed revenue projections for the first quarter reported in August, with its core domestic e-commerce business feeling the strain from reduced consumer spending amid economic uncertainties in China.

Impact of Layoffs

The layoffs at Yuanjing have affected teams based in Shanghai and Hangzhou. Although specific numbers have not been disclosed, reports indicate that dozens of employees were impacted. The term “business optimization” is often used by Chinese companies to describe such workforce reductions, aiming to mitigate negative public perception.

Broader Industry Trends

Alibaba’s decision to reduce its metaverse workforce mirrors a broader trend among major technology companies that are scaling back investments in the highly publicized metaverse sector while reallocating resources toward artificial intelligence (AI).

Comparisons with Other Tech Giants

Similar actions have been observed across the industry; for instance, Meta Platforms, the parent company of Facebook, has also laid off employees within its Reality Labs division focused on metaverse projects. Additionally, Baidu experienced leadership changes within its metaverse division as it shifted focus toward AI advancements following the introduction of generative AI technologies like ChatGPT by OpenAI.

Future Directions for Yuanjing

Despite the layoffs, sources indicate that Alibaba’s metaverse division will continue to operate with a focus on developing metaverse applications and tools, as well as providing related services to customers. This suggests that while Alibaba is scaling back its ambitions in some areas, it remains committed to exploring potential opportunities within the metaverse framework.

Ongoing Projects and Innovations

Yuanjing had been working on a cloud-based operating system designed to support metaverse integration in video gaming and various industrial applications. Alibaba’s ventures related to the metaverse included leading a $60 million investment round for Nreal, a Chinese manufacturer of augmented-reality (AR) glasses. AR, along with virtual reality (VR) and mixed reality (MR), is widely seen as critical for accessing metaverse platforms.

Conclusion

As Alibaba navigates these changes within its metaverse division, it reflects a significant shift in strategy amidst broader economic challenges. The company’s decision indicates a recalibration of priorities as it seeks to enhance operational efficiency while exploring new avenues for growth.

Market participants will be closely monitoring how these developments unfold and what they mean for Alibaba’s future initiatives in both the metaverse and AI sectors. As consumer interest evolves and economic conditions fluctuate, Alibaba’s adaptability will be crucial in maintaining its competitive edge in the tech landscape.

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Zepto Delays IPO to Focus on Profitability and Indian Ownership

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Zepto - StartupStories

Overview

Zepto, a leading quick commerce startup, has postponed its planned IPO to early 2026, shifting its focus to achieving profitability and increasing Indian shareholding before going public.

Key Reasons for Delay

  • Profitability Focus: Zepto aims to reach EBITDA break-even before listing, unlike many tech firms that went public while still loss-making.
  • Market Uncertainty: Ongoing global and domestic market volatility influenced the decision to wait for more stable conditions.
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Boosting Domestic Shareholding

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  • Actions: The company is conducting secondary share sales to Indian investors and founders are increasing their stakes by buying from foreign investors.
  • Progress: Domestic ownership has reached about 40-44%, with expectations to surpass 51% before the IPO.

Financial and Operational Updates

  • Efficiency Drive: Zepto is optimizing operations, running over 900 dark stores and offering 48,000 SKUs, to reduce cash burn and move toward profitability.
  • Challenges: The company faces stiff competition from Swiggy Instamart and Blinkit, leading to higher costs, and has dealt with operational pauses and regulatory scrutiny in some regions.

Outlook

Zepto remains positive about its future, aiming to raise around $800 million in its IPO and attract both domestic and international investors. CEO Aadit Palicha emphasizes building a sustainable, majority Indian-owned business before entering the public market.

Summary: Zepto’s IPO delay reflects a strategic focus on financial stability and regulatory compliance, with profitability and Indian ownership at the forefront.

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Sandeep Nailwal, co-founder of Polygon, has been appointed as the first CEO of the Polygon Foundation, marking a shift from decentralized governance to focused leadership. This change aims to provide clear direction and accelerate Polygon’s growth in the competitive blockchain space.

Under Nailwal’s leadership, Polygon will discontinue its zkEVM network in 2026 to concentrate on the Polygon PoS chain and AggLayer, a new cross-chain liquidity protocol. Significant upgrades to the Polygon PoS chain are planned, starting with the Bhilai upgrade in July 2025, to enhance transaction capacity and support large-scale financial applications.

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Wow! Momo Raises ₹85 Crore from Stride Ventures to Accelerate Nationwide Expansion

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WoW Momo StartupStories

Wow! Momo, the Kolkata-based quick-service restaurant (QSR) chain, has secured ₹85 crore (approximately $9.9 million) in debt funding from Stride Ventures, aiming to accelerate its omnichannel expansion and strengthen its presence across India. The company, which operates over 700 outlets in more than 70 cities, plans to utilize the funds to open additional dine-in restaurants, expand its packaged food (FMCG) vertical, and enhance its delivery and supply chain operations. This strategic move will also help refinance existing loans and fuel Wow! Momo’s push into new markets and product categories.

Founded in 2008, Wow! Momo has rapidly diversified its offerings, launching brands such as Wow! China, Wow! Chicken, and Wow! Kulfi, and recently entering the frozen foods segment with quick commerce and retail distribution. The company is targeting a footprint of over 1,500 stores across more than 100 cities within the next three years and aims to grow its FMCG business to ₹100 crore while ramping up its HORECA (Hotel, Restaurant, and Catering) segment. The leadership team views this debt infusion as pivotal for scaling new formats, driving innovation, and building brands that resonate with Indian consumers.

Stride Ventures, known for backing high-growth startups, emphasized Wow! Momo’s strong brand recall, robust business model, and relentless innovation as key reasons for their investment. With this funding, Wow! Momo is well-positioned to further solidify its status as a category-defining player in India’s QSR and FMCG sectors, while preparing for larger equity rounds and a potential IPO in the coming years.

 

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