Alibaba Group Holding Ltd Freezes Hiring To Focus On Efficiency


Chinese online retail giant Alibaba has frozen all hiring for the rest of the year. Alibaba founder Jack Ma said in an internal meeting with employees that the company had expanded “too quickly” and a workforce of about 30,000 was enough for now. A transcript of his speech was posted to the e-commerce giant’s official account on social media app Laiwang.

Alibaba’s headcount won’t increase by one person

Ma said the Hangzhou-based company would hire a new employee only when a current one leaves. This year, the “entire group’s headcount won’t increase by one person,” he added. It means the hiring freeze also applies to companies controlled by Alibaba. Ma said Alibaba needed to “get into formation.” As of December 31, 2014, the company had 34,081 employees, up 63% from a year earlier.

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Alibaba, Asia’s largest Internet company, has more than 334 million active buyers. It processes more than 11 billion orders every year. Its hiring freeze comes just a week ahead of the company’s first-quarter results. Alibaba is scheduled to report its March quarter results on May 7. Ma aims to serve more than two billion customers worldwide by 2019.

Alibaba links headcount to GMV

Jack Ma said that the company’s headcount should remain below 50,000 as long as gross merchandise volume (GMV) was below 10 trillion yuan ($1.6 trillion), reports Reuters. GMV for the year ended December 31, 2014 was 2.3 trillion yuan. So, a headcount of “over 30,000” was sufficient for now, Ma said. Alibaba has increased its workforce significantly in recent years as its online marketplaces grew exponentially, and the company prepared for a historic IPO last year.

Alibaba is facing a slowing revenue growth in its home market. The company is investing aggressively in a variety of businesses ranging from entertainment to taxi-hailing services to messaging apps to maintain its growth. Alibaba is betting on emerging markets such as India, Russia and Brazil to sustain growth. Jack Ma wants over 50% of the company’s sales to come from outside China.

Alibaba shares fell 0.81% to $84.39 in pre-market trading Wednesday.

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