According to a report from Morgan Stanley, the media is misinterpreting a recent speech made by Alibaba chairman Jack Ma. The reports says the media headline of “job freeze for Alibaba in 2015” is misleading as the company has already been on a hiring spree and Ma has long emphasized that “headcount is not the way to grow GMV.”

Alibaba Group Holding Ltd: Jack Ma Speech Misinterpreted By Media

Lost in translation

The Morgan Stanley analysts argue that Ma’s speech was clearly “lost in translation” by the media.

They say Ma’s speech was meant to rally and show commitment to the new members of the group. Alibaba operates in six business categories: 1) eCommerce, 2) Ants Financials, 3) ChinaSmart Logistics, 4) big data  and cloud services, 5) advertising services; and 6) cross border. The MS analysts also suggested that the “seventh category” may be “the future of Alibaba.” They say that Alibaba could move core eCommerce and into “other Internet services” within a few years.

Ma has said on a couple of occasions in the past that the firm needs employees to be innovative and resourceful, and that headcount “is not the way to grow GMV.” In fact, Ma has stated he plans for “Alibaba to achieve Rmb10 trillion GMV with no more than 50k employees.” He clearly believes that more innovation and better productivity is how the company will achieve this ambitious goal.

Alibaba is also committed to creating a “vibrant ecosystem” in which its partners can do business. Related to this, Ma believes that increasing the number of Alibaba employees would mean less businesses for its ecosystem partners.

Alibaba may face near-term pressures

In his speech in Beijing, Ma did warn that the restructuring (or optimization, if you will) of several business units this year could pressure on the firm’s near-term financial performance.

The MS analysts say these restructurings were expected and are a sign of forward-looking management. “While the Street may read this as a negative that signals muted earnings catalysts in the coming quarters, we agree with the company that such restructuring would be necessary for Alibaba to become adaptive to a rapidly changing competitive landscape.”