What's Going On With Alibaba Stock Wednesday?
Alibaba Group Holding Ltd’s (NYSE:BABA) subsidiary, Daraz Group, a prominent e-commerce entity in South Asia excluding India, is poised for another round of layoffs amid ongoing market challenges, just a year after reducing its workforce by 11%.
Acting CEO James Dong, who oversees Alibaba’s Southeast Asian e-commerce division Lazada, announced this difficult decision in an internal memo, highlighting the company’s struggle to meet financial targets against “unprecedented challenges.”
Acquired by Alibaba in 2018, Daraz has not disclosed the number of employees affected by these latest cuts across its operations in Pakistan, Bangladesh, Sri Lanka, and Nepal, SCMP reports. The stock is trading lower on Wednesday.
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This move reflects the broader necessity within Alibaba’s International Digital Commerce Group, which encompasses Daraz and Lazada, to optimize operations and drive sales growth.
The group, including AliExpress, reported a 24% year-on-year increase in combined orders for the December quarter.
The layoff announcement follows a trend of job reductions in the tech industry, attributed to various global economic pressures. Daraz, founded by Rocket Internet in 2012 and expanding significantly through acquisitions and organic growth, now boasts over 30 million monthly active users across its four operational countries.
Alibaba’s international ventures, including Daraz, experienced a notable 44% revenue increase in the December quarter, outpacing the growth of its core Chinese e-commerce business.
This week, co-founder Joe Tsai expressed optimism about Alibaba’s prospects despite antitrust fines and postponed IPOs of the cloud unit and logistics arm.
Invesco Golden Dragon China ETF (NASDAQ:PGJ) and Tidal Trust II CoreValues Alpha Greater China Growth ETF (NYSE:CGRO) have close to 8% exposure to Alibaba. The ETFs have gained 7-10% last month.
Price Action: BABA shares traded lower by 3.27% at $75.14 on the last check Wednesday.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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