Alibaba Group Holding's plan to split into six business groups and go public separately has sparked fears of layoffs.

(Reuters)

[Financial Channel/Comprehensive Report] Sources told Nikkei Asia News that Alibaba Group Holding's plan to split into six business groups and list separately has sparked concerns about layoffs at the Chinese e-commerce giant.

The overhaul announced on Tuesday was welcomed by investors. On Wednesday (29th), Alibaba’s Hong Kong-listed shares soared 16%, closing up 12.2% to 94.55 Hong Kong dollars. The company’s American depositary receipts soared 14.26% overnight in New York.

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But the move away from Alibaba's centralized structure has raised concerns among some of its nearly 240,000 employees after Alibaba cut about 20,000 jobs last year.

A senior Alibaba manager said the reorganization had raised many concerns about whether the company would abandon its years-long central platform strategy and whether the central platform would cut staff significantly.

Two other employees of Alibaba's central platform also told Nikkei that they thought their team might be disbanded.

"The company told us today that some of the central platform employees will be transferred to different new businesses; however, I'm afraid there will be layoffs," one person said.

Alibaba CEO Daniel Zhang launched the central platform strategy in 2015, two years after taking the job.

The e-commerce group will be restructured into 6 new groups, Cloud Smart Group, Taobao Tmall Business Group, Local Service Group, Cainiao Smart Logistics, Global Digital Business Group and Digital Media Entertainment Group, each group will be headed by its own CEO and the board of directors, the new chief executive will assume responsibility for the company's performance.

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